Lawyer facing censure for role in loans
By John Joyce
Published in News on July 31, 2013 1:46 PM
A grievance has been filed with the North Carolina State Bar against a Goldsboro lawyer involving real estate loans processed between Jan. 1, 2004, and April 26, 2006.
James Thomas Brown Jr., of the firm Duke & Brown, was the closing attorney for nine purchase transactions allegedly disguised as refinances.
The complaint is scheduled to be heard before the Bar's Disciplinary Hearing Commission Aug. 13 at 10 a.m. in the State Bar's Large Courtroom in Raleigh.
Brown allegedly knowingly falsified HUD-1 Settlement Statements, documents itemizing services and fees charged to the borrower by the lender in the process of purchasing or refinancing real estate, according to the N.C. Bar Association disciplinary complaint.
The loans were secured through Southern Bank in Mount Olive and resulted in ownership of each of the nine properties changing hands, the complaint asserts.
Southern Bank underwrote the loans as if they were refinance loans rather than purchase loans, resulting in the bank loaning more money than it would have in a purchase transaction. In several instances, the loan amount exceeded the purchase price of the property, according to the complaint.
Cases such as the one involving Brown are forwarded to the Disciplinary Hearing Commission by the State Bar Grievance Committee when the committee believes a suspension or disbarment is likely to be the appropriate discipline, according to the bar association.
State Bar Association counsel Katherine E. Jean said she is not permitted to comment on the hearing throughout its process, other than to say it is in no way a criminal proceeding. Rather, it will pertain to the status of the lawyer's license to practice.