The Florida attorney general has opened a criminal investigation into the sale of three dozen homes by a Tampa real estate agent after the Tampa Tribune published a story suggesting the properties were sold at inflated prices.
The Florida Department of Business and Professional Regulation opened its own investigation Monday, asking appraisers and at least one real estate broker for records connected to 36 sales by real estate agent Dawn L. Molen, the Tribune reported Tuesday.
The Tribune on Sunday published the results of its own five-week investigation, which alleged that the homes sold at an average of $60,000 above their original list price. Although sellers typically received their original asking price or less, buyers obtained larger mortgages based on inflated appraisals, the Tribune reported.
The recorded sales prices exceeded the amount paid to the sellers by $2 million, with the extra proceeds paid to companies associated with Molen, the newspaper said. The difference between the amount sellers were paid and the recorded sales price was listed as an “assignment fee.”
Nearly all of the buyers were from Indiana, and belonged to an investment group led by Chad Evans and Chris Malcom, the Tribune reported. Evans, 33, is a founder of Shorefront Ventures LLC and Tye Funding LLC, which received assignment fees, the paper said.
Evans told the Tribune that the deals were structured in a way that would allow buyers to have cash available to make improvements to the homes. But the Tribune said Evans, Malcom and Molen refused to answer detailed questions about their transactions.
At Molen’s request, the listing agents for most of the homes agreed to inflate the asking price in the Multiple Listing Service, in order to help get lenders to approve a bigger loan, the Tribune reported.
The same appraiser was used in most of the transactions, and a single title company, Ocean Title & Abstract, handled the settlements on all 36 sales, the Tribune reported.
The Tribune said it interviewed more than a dozen sellers and listing agents who said they were uneasy with the transactions but went along after being told they were legal by employees at the title company, which refused to comment for the story.
A former commercial loan officer, Molen, 26, was fired by two real estate brokers who employed her after they became suspicious about the sales, the Tribune said. Her supervisor at Charles Rutenberg Realty in St. Petersburg said he became suspicious when other agents came forward and said Molen asked them to change MLS listing prices.
Molen’s boss at RE/MAX ACR Elite Group in south Tampa told the Tribune he called the FBI and gave them copies of 18 of Molen’s pending sales contracts after he became suspicious. Evans continues to try to close those sales, the Tribune said.
The Tribune said the inflated prices recorded for the sales Molen did close have complicated the process of appraising nearby properties accurately. One appraiser told the paper that many other homes appear to have sold for substantially more than the original price, at a time when home values are falling.