Seriously, why do people think that everyone is crooked and willing to participate in their schemes??

I have been working with a realtor for 4 months now on a short sale transaction that finally got lenders (2) approval in the middle of June.  Upon hearing  from the lenders that the transaction was approved the Listing agent Realtor called me to schedule the closing and advised that the seller would be calling me later that day. I did in fact receive a call from the seller that day and was absolutely STUNNED to hear what they had to say.  

The property that was encumbered by the mortgage contained about an acre and a half of land and had a house on it.  The seller called to tell me that it was their desire to "sell" only half of the property to the buyer (the half containing the house); pay the lenders off and then went on to say that they were going to sell the other half of the property to another person.  I advised them that I could not be a party to this transaction as they were attempting to defraud their lenders who had FINALLY approved the short sale transaction.

Their realtor called me later that day to ask why I had a problem with this transaction structure!  SERIOUSLY.  What was not clear to this realtor? The lenders had used the ENTIRE property as collateral for their loans and as such expected that the seller would not attempt to split the property in two, sell one half of it to get the lenders off of their back and then sell the other half, which would then be unencumbered by any mortgages to another?!! After some discussion I was advised that the realtor was going to see if they could find a title agent who would handle this transaction.  Some time later the next day the Realtor called to advise that they were able to find a title agent to handle the matter and asked that I sell my work to the title agent that was going to handle the matter.  And that's what I did. 

I received a check in the mail today from the title agent who handled the transaction and can only assume from the delivery of the check that the matter had been closed in accordance with the seller's plan.  I am almost tempted at this point to contact the lenders to make them aware of this fraud. 

This is an absolute case in which there is no question that the selller,  the buyer, the realtors and the title agent knew what the seller was trying to do and not only did they encourage it, they actually found the resources on behalf of the seller in order to make this transaction work. 

It has never been my practice to participate in any transaction in which I did not have a "warm and fuzzy feeling" about the entire transaction. I have always relied upon "gut" feelings and so far as I know have never knowingly been involved in a transaction in which one of the parties was attempting to commit a fraud.  Not that we independent title agents can afford to turn away business these days, but this was a deal that I could not get off of my desk fast enough!! Use your intuition. If it doesn't feel right DON'T DO IT!!  Integrity is not something that you can get back easily once lost.  

I might just periodically check on this property to see what, if anything, ever comes to light about the way in which this was handled.