♫I’m just sitting here watching the lawyers go round and round....♫

[captainsblog]

I’ll start off with some updates on the news of the week(s) that I wrote about the other day. I went in to schedule my first PT appointment, which will be on Monday afternoon. It’s a facility right down the road from here that Eleanor went to a few years ago and was very happy with. I went in person rather than having to navigate voicemail systems, and when a woman came in right behind me who was clearly “dressed for class,“ I let her go ahead of me, because I figured I would take longer with the receptionist than her just checking in would. Even though I still can’t go forward very quickly, I can still pay it forward when I can. And of course, after making the appointment, I woke up the next morning feeling the best I felt in a week, and did again today, taking Pepper for full walkies both mornings, so it may be healing up on his own. I will still go, if only to get some professional suggestions for stretching and about what limitations I may need to follow.

The other news, fortunately, is no news. Whoever was faking my phone number all over the country on Monday seems to have been stopped, or at least got bored and moved onto their next victim. So now I have to remember to turn that voicemail message off.

The other thing I’ve been meaning to write about, though, is the increase I’ve been witnessing in really bad practices of law I have encountered in the past few weeks. I’m happy to say that none were by me, and none had really any direct effect on any client of mine, but they were all painful to watch. I may not be a perfectionist, but I hate finding out that I’ve made a mistake, even a minor one, and will usually worry, and even lose sleep sometimes, if I feel there’s a way to make it right. Just the other day, I redid the execution of an entire document because of one word on one page. Even though I was the only one that ever would’ve noticed, and even though I concluded it had no effect on the validity of the document itself, I made the call and made the fix, and slept much better that night because of it.

I wonder how these people are sleeping that I’m about to tell you about.

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The earliest of these was a couple of weeks ago. I understand what happened, but to convey it (heh), I have to explain a little bit of how real estate closings are done around here. What follows is more than I learned in the entirety of law school about it, but don’t worry, because I didn’t learn anything about how to do a real estate closing in law school and neither did anybody else.

Meet Joe and Jane Seller. Somebody makes an offer to buy their house for 200,000 bucks. Once that offer is accepted, the mortgage is approved, the title work is done and a closing date is set, the lawyers get down to the numbers. Joe and Jane will usually gross a little more than the 200K, because of adjustments related to property tax allocation. Then the 200+ will be reduced- by the amount of buyers’ deposit and sometimes other credits. Let’s say it all works out to 190 by the time the lawyers do all that math. Now come the three key words: PAID AS FOLLOWS.

Joe and Jane probably have a mortgage on that house that has to be paid off when the deal closes. We’ll call it $50,000. The bank for the buyer, which is issuing its own new mortgage, will typically issue a $50,000 check to pay off the old mortgage and a check for 140 directly to Joe and Jane. This may seem odd at first because the buyers don’t owe that 50K, but it’s just a convenient way of getting funds transferred as quickly as possible with as few hops, skips and jumps through various bank accounts. And since all the buyer is paying is the 190, they shouldn’t care where it goes, right?

So here’s what happened. When the sellers’ lawyers office did a first draft of the closing statement showing those figures, they didn’t have the clients’ mortgage payoff amount yet. So they just put the 190 as “paid as follows“ to Joe and Jane. Then came the mistake. When that $50,000 payoff amount came in, somebody put it on a line item below the 190, but never reduced the line above it by the 50. (Come back tomorrow. We’re gonna do fractions.)

That, as things go, with a fairly big mistake. The person who made it is no longer employed. But it should’ve ended right then and there, because on the other end, the lawyers for the buyer should’ve been either doing their own version of the closing statement, or meticulously reviewing the one from the seller, either way catching that mistake like a lazy infield popup.

They did not. “They,” in this case, were lawyers who were representing both the buyer and the new mortgage  bank at the closing. That’s a semi-skeevy arrangement in Real Estateland, but I’ve seen it more and more commonly as bar associations and banks have come up with disclosures to deal with the prickly ethical issues resulting from the dual representastion. Not only did those lawyers not notice, they happily wrote checks out of their trust account, which was not labeled as a trust account, for 190,000 to Joe and Jane and another 50K to pay off their mortgage.

I assure you that someone at the actual new bank did not give that lawyer 240 K for that transaction. That means either the lawyers' trust account check for the 190 (or the 50 or maybe both) was going to bounce, or, more likely, he was just spending somebody else’s money sitting in his trust account to fund that extra fitty. Both of these are big no-no’s, and if he ever gets a state audit on that trust account, he’s gonna have some splainin to do.

(“He,” btw, is some n00b I’ve never heard of, probably spun off of a bigger real estate practice and got the bank as a client because he underbid his old firm.)

Fortunately for everybody, Joe and Jane are very nice people;  they picked up and deposited their 190 check, and then the next day Jane called her lawyer, suddenly wondering why they’d gotten the full amount when their mortgage was paid off separately. That started a four day marathon of hops, skips and jumps through various banks and trust accounts as everybody tried to put the toothpaste back in the tube. Payments were stopped and unstopped, that 190 check did eventually bounce when payment WAS stopped on it (which may start the audit that kid is going to have to worry about), but by the end of July, all was well, except for the one and probably more people who lost their jobs over it.

Seeing stories like this would explain why I don’t do real estate anymore- my two brief dabbles in it earlier this year held up my own malpractice renewal for a week while they made sure I wasn’t submitting fake appraisals for Donald Trump- and why I am positively anal about checking every trust account withdrawal to the penny and balancing it against the bank statement and my client funds printout every month so I’m not giving away 50,000 of other peoples money to myself or anybody else.

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Right. I’ve dabbled for too long, and I’m almost done walking the dog, so I’ll save my other two lawyer stories for our next exciting episodes, of “Wheel… of… MECHANICS LIENS!” and “I am not a potted plant, but HE is!”