Granitur, as an escrow agent, needed to truthfully and accurately prepare and distribute a settlement statement to the financial institutions. The statement is known as the “HUD-1,” and the financial institution reviews it prior to the real estate closing. The closing statement needed to accurately reflect, among other things, the sale price, the closing funds provided by the borrower and all of the seller’s contributions.
As an escrow agent, Granitur was also responsible for receiving and holding in trust, in an escrow account, the mortgage loan proceeds from the financial institutions that financed the purchase of the condominium units. He was also responsible for disbursing the loan proceeds only after final approval by the financial institutions.
Details are Lynchpin
Granitur knowingly transmitted a false closing statement to a federally insured financial institution. The HUD-1 closing statements failed to truthfully disclose seller credits and incentives. Additionally, the closing statements failed to disclose that the seller was paying the buyer’s “cash-to-close.” The financial institutions relied upon the closing statement in authorizing the release of funds.