War Stories from Coast to Coast

By Lisa A. Tyler
National Escrow Administrator

From Tampa to Oregon, our closers are the best, bar none! In this issue of Fraud Insights, read about our employees going the extra mile and using ingenuity to solve some of our most common problems.

Rewards! The Company has rewarded two more employees for their efforts to detect and prevent criminal activities during two recent real estate transactions. Read about the ring of bad guys caught by Nancy Bradshaw and Natalie Allshouse. They were each rewarded with a check for $500 in recognition of their insight and follow-through efforts that saved the Company future claims and losses.

If someone in your office has passed this newsletter on to you and you are not on our mailing list, please let us know by sending your contact information to settlement@fnf.com. Fraud Insights is an internal publication and is currently distributed to employees. However, agency representatives are encouraged to spread the word and forward this information to our network of title agents nationwide.

If you have an incident of fraud or forgery that you would like to share in this communication, please forward your article ideas to us at settlement@fnf.com. Not good at authoring? No worries, we will interview and write your article for you – just give us a call at (888) 934.3354. Want to remain anonymous? That is not an issue either; we will provide an alias for you free of charge! So call us or e-mail your stories today.

This Ring of Bad Guys Could Be Coming to Your Town Next

Nancy Bradshaw, Escrow Officer at the Belleair Bluffs office and Natalie Allshouse, Gulfport Escrow Branch Manager, both from the FNT Tampa, Florida operation, were working on individual suspicious transactions. Nancy reported her suspicions to her Escrow Manager. Natalie reported her suspicions to her County Manager, since unbeknownst to her the Escrow Manager was already deeply involved in the other case. Little did they know how interrelated the two transactions would soon become.

Nancy ’s file was an $860,000 purchase

  • Seller submits an invoice for “services rendered” in the amount $135,000

Natalie’s file was a $1.2 million purchase

  • Seller submits an invoice for “services rendered” in the amount of $200,000

The following red flags were the same between the two transactions:

  • Payment of the invoice was to be remitted to a corporation in Indiana
  • Mervin Jones was the buyer (straw buyer, or a loan applicant whom perpetrators use to obtain home loans, but who usually doesn’t intend to occupy the purchased properties )
  • The entire deal was orchestrated by the seller; the Escrow Officer never had contact with the buyer
  • There was no down payment; the loan represented 100 percent financing
  • Buyer was relocating from Indiana to Florida
  • Seller was located in Indiana, even though the property was in Florida

After the Escrow and County Managers started to link the two files, they did some investigative work. Based on their investigative tactics, they should be appearing on the next episode of CSI: Miami. Using Choicepoint, the nation’s leading provider of identification verification services and other tools, the managers of the Tampa operation were able to uncover the following:

  • Both deals were orchestrated by the same mortgage broker
  • The buyer indicated he had been employed with the same company for three years; however, the company had only been incorporated for less than one year
  • Appraisals had both indicated these were “distressed sales”

Further investigation revealed that the $860,000 property had been purchased only three months ago for $638,000, a difference of $222,000. The $1.2 million property had been purchased less than twelve months prior for $750,000.

The managers decided to take action. Armed with the aforementioned evidence, they reported the suspicious mortgage activity to the funding lenders in both transactions.

The lenders decided to re-verify their borrower’s employment. Each lender left a voicemail message at the borrower’s supposed place of employment. In both instances, the employer called back from a cell phone and the return phone call was from the same “corporate officer” each time. Of course, the borrower’s employment record was nothing short of stellar, but the lender found it odd that the “corporate officer” verifying employment for the borrower had the same exact name as the purchaser listed on an unrecorded land contract for the borrower’s Indiana property!

Both lenders decided that the facts warranted further investigation. They soon discovered that no address or business existed for the employer in the State of Indiana as purported. The lenders both decided to pull their loans.

Needless to say we resigned as escrow holder and title insurer for both transactions. But wait – there’s more! The managers ran the names of the principals at all branches only to find that they had previously closed two transactions for these same parties and had open orders for an additional four transactions. They resigned on all transactions and proceeded to publish the names of the perpetrators with all Corporate Underwritering staff and Claims Officers throughout the Company to help other operations avoid the same scheme.

This was a complex scheme by multiple ring leaders. Unfortunately, in our industry we are exposed to fraud everyday – the majority of which is never acted upon. Due to the professionalism and expertise of our closers, they were able to identify the red flags and react swiftly to halt the transactions and put an end to these scams – as well as putting the rest of our operations on notice.

Along with our gratitude and recognition, both Nancy and Natalie have received rewards from the Company of $500 each.


The Patriot Act Provides a Good Solution

Our Fidelity office in Portland, Oregon was working with a builder whose employee decided to purchase one of their new homes. The builder also owned a mortgage brokerage. Escrow was opened and the borrower began his loan approval process. The mortgage broker discovered that the borrower was using more than one alias, including multiple Social Security numbers.

The mortgage broker informed our escrow officer that he could not underwrite the loan and told her about the aliases. The same buyer went to another mortgage broker who did not do as thorough of a search on the applicant and approved him for a new loan.

Now our escrow officer was in a pickle. She was aware that this buyer might be using a fake identity, but had no hard evidence other than the word of the first mortgage broker. The escrow officer contacted our in-house legal counsel for assistance.

Our in-house counsel, Pat Ihnat, informed the borrower that our Company would not be willing to certify his identity on the lender’s Patriot Act Certification form and therefore we could not close his purchase transaction. Brilliant, indeed!


Illegal Residents - What Is the Policy for Closing?

Our operations have reported an increase in the number of cases involving illegal residents trying to close real estate transactions. In many cases, they do not have valid forms of identification and since we are using Bancserv for outside signings, more of these cases are being exposed. But what should we do if we gain personal knowledge during the processing of the escrow transaction that the clients are in the U.S. illegally?

Eric Salter, Western Regional Counsel for Fidelity National Title, provides the following answers: An illegal resident may hold title to real property like anyone else. His (or her) title is insurable, with no special exceptions, even if you know his/her immigration status. Nor do you have any obligation to report his/her immigration status to law enforcement. If you learn that a party to the transaction is an illegal resident, extra care is required to verify his/her identity, as many illegal residents use forged drivers’ licenses. However, it is possible for an illegal resident to have a valid identification, such as a Mexican driver’s license, and though he/she cannot obtain a Social Security card, an illegal resident can obtain an Individual Taxpayer Identification Number (ITIN).

If you have a transaction involving an illegal resident and need assistance in validating the identification presented to you, please do not hesitate to contact Escrow Administrators at (888) 934.3354 or via e-mail at settlement@fnf.com.


I Have Finally Found a Worthwhile Use for My Camera Phone!

At a recent Annual Escrow Training seminar in Tampa, Florida, a group was discussing fraud and identity theft. Many of you are aware that lenders rely on us to help them comply with Patriot Act requirements. Often, we are asked to complete a form and provide a copy of the ID presented. But what do you do if you had to go outside of your office to obtain signatures? One of the attendees shared a very good use for a camera phone: she uses it to take a picture of the ID that she is presented.

Several other attendees added that they bring a digital camera with them. What a great way to provide exceptional customer service and still protect yourself and the Company!

Your Escrow Administrators appreciate “tips and tricks” like these and would like to know more about how you utilize the latest technologies to process your closings. To share your ideas, please e-mail settlement@fnf.com.