Altered fictitious12/24/2023 ![]() ![]() ![]() The OAC filed an Affidavit of Claimant on the refund check disbursed to the buyer. Neither Bank of America nor Wells Fargo would provide assistance since the office accepted and negotiated an altered check – even though they had already refunded the buyer their earnest money deposit. Bank of America referred back to the banking agreement. ![]() They contacted Bank of America upon receipt of the notice our account was debited. The operation is on their own to prove they were entitled to negotiate the check.Īccepting an altered or endorsed check is done solely at the operation’s own risk… As a matter of fact, accepting an altered or endorsed check is done solely at the operation’s own risk, since the banking agreements Our Company enters into offer no protection for these checks. The risk of accepting altered checksĪnytime a settlement agent accepts an altered check, he or she subjects the instrument to questioning. Wells Fargo immediately contacted our bank, Bank of America, who reviewed the affidavit. When a fraud report is filed, banks act quickly to freeze the amounts in question while they determine the merits of the report. Shortly thereafter, our Operational Accounting Center (OAC) received notice from Bank of America that our trust account was debited $1,000 based on the fact the original earnest money check was altered. The buyer deposited the refund into his account at Wells Fargo. The settlement agent cut a check from the trust account to the buyer, representing the refund of the earnest money. Simultaneously, the sellers signed mutual cancellation instructions agreeing to return the earnest money to the buyer. When the request was denied, he filed an Affidavit of Forgery, claiming the check was altered and cashed without his approval. In the meantime, the buyer went to his bank, Wells Fargo, and tried to place a stop payment on his earnest money check. The real estate agents began negotiating for their respective clients. The settlement agent prepared the cancellation instructions and sent them to the listing agent.Īt first, the seller was not sure they were willing to give the money back to the buyer. His real estate agent instructed the settlement agent to prepare cancellation instructions reflecting the earnest money as being refunded to the buyer. About a month later the buyer decided he wanted to cancel the transaction. The settlement agent receipted-in the funds and began to process the transaction. Rather than obtain a new check for $1,000, the buyer simply crossed through the original payee, wrote in our company name and initialed the change. The check was originally written to Old Republic Title Co., but during negotiations the principals agreed to change the escrow and title company to ours. Per the agreement, the amount of earnest money due was $1,000. One of our sister offices received a fully executed Purchase and Sale Agreement, along with a personal check representing the earnest money. In this story, our office accepted an altered check which proved to be risky. Accepting the check is done at the sole risk of the operation. Real estate agents do not want to go back and ask their buyer for a new check, so instead the check is altered and the buyer initials the changes. This usually occurs when the buyer’s original offer to the seller indicates one escrow company and then, somewhere in the negotiations, the principals agree on another escrow company. Settlement agents are regularly pressured into accepting altered checks (which they should not) for earnest money.
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