Nightmare scenario from local title company

Got a call from Jody Tutt. She runs Southern Title Services in Seminole.

She got stung badly when HomeBanc Mortgage Corp. declared bankruptcy on Aug. 9.

Tutt was handling a home closing and processing a $416,000 check from HomeBanc. Hours later came the bankruptcy announcement.

The HomeBanc check bounced. Tutt herself, as the funding agent, was legally obliged to make good on the missing $416,000.

She had to draw on her own line of credit and is now the mortgage holder for the new home buyer.

She's not alone. According to Tutt, HomeBanc's funding cutoff affected 136 other transactions in Florida, Georgia and North Carolina.

Word to the wise: If you're closing on a home, better have the money wired over. As Tutt can tell you, checks are risky business during the current credit crunch. 

Comments

[JR]

I'm surprised title companies take checks at all these days. Only one of the dozen or so lenders we work with on a regular basis even provides the option to send a check instead of a wire.