Vacant Land Sales Pose High Risk
By Lisa A. Tyler
National Escrow Administrator
An escrow officer from Fidelity National Title in Coral Springs, Florida submitted a story for a chance to receive a $500 reward about a scam she detected that involved deeding vacant lots from unsuspecting, out-of-state owners in exchange for cash. Read about the "Vacant Land Scam" in this edition of Fraud Insights.
Even if there is no criminal intent, bad notary practices can lead to your unknowing participation in forgery or fraud. Some notary best practices may seem obvious or even humorous, but they are worth repeating. Learn more about these important guidelines in the article entitled, "Notary Best Practices."
Reviewing death certificates can be both morbid and fascinating – but for many of us, it's also a part of our jobs. "The Living Dead" contains a legitimate reason to carefully study the date of death on a death certificate in the chain of title.
I've got money burning a hole in my pocket and I am anxious to get rid of it. Submit your story of heroics today to email@example.com or call 888.934.3354. Each submission is an automatic entry for a chance to win a $500 reward for your efforts in preventing fraud and forgery in your own transactions.
Are previous editions of Fraud Insights causing you to receive an "over your limit" message in your e-mail inbox? Now you can stop storing them. Find previous editions of Fraud Insights at home.fnf.com under "Internal Publications."
Vacant Land Scam
Vacant land sales pose a risk to the Company, especially when the owner is out-of-state and unaware of the sale. Read how this escrow officer listed her suspicions and then confirmed them one-by-one.
An escrow officer from Coral Springs, Florida was asked to close three individual vacant lot purchases by one of her reputable builders. The seller was the same on all three lots and, as with most vacant land purchases, the transaction had a quick closing date.
The escrow officer received her title commitments and previously recorded deeds on all three properties. She noticed that all of the deeds to her seller were only two weeks old. The notary on all three deeds was the same, even though the grantors were from three different states.
The escrow officer was growing more suspicious by the minute. She called the attorney who prepared the deeds, whose address was listed as Jacksonville, Florida – only to find out the attorney didn't exist! She decided to contact the three previous lot owners. Her suspicions were immediately confirmed. None of the three owners were aware of the sale of their vacant lots in Florida nor that someone had recorded deeds with their signatures on them.
The escrow officer turned the facts over to the Marion County Police Department and reported the name of the forger to her district manager. She notified the builder/purchaser of the forgery, cancelled the transactions and returned the purchaser's money.
Months later, the forger is still a free man and still committing the same crimes! Recently, the escrow officer was able to pull up a deed insured by another company from the forger. The escrow officer immediately notified the investigator assigned to the case so he could add this latest scam to his list of evidence. In the meantime, all Florida underwriters have posted the name of the criminal to their plant records to prevent him from scamming any more unassuming vacant land owners.
Moral of the Story
Vacant land sales for out-of-state owners are risky for the Company and for the public. If the property owners are out-of-state, there is no way for them to know when someone has forged a deed and then posted their properties for sale. These types of transactions are usually "all cash" and close quickly with little or no contingencies. There are typically no stop gaps to this type of fraud – other than you! Be diligent and investigate your suspicions before you close.
Notary Best Practices
Fraud and forgery are ever-growing problems for the title industry. Excellent notary practices can help stop illicit transactions in their tracks.
Notice that this article is titled "Notary Best Practices" and not "Notary Rules" because notary statutes and requirements vary by state. The best practices outlined below are always a good idea, even if not required by local laws.
- Don't waste time! Always verify IDs before any papers are signed.
- Whenever acknowledging a signature, be sure to look at both sides of the customer's identification. It is acceptable to have the receptionist photocopy the ID for the file, as long as you have reviewed the original ID.
- Closely examine the customer's physical description, especially his/her age, weight and eye color, and verify this information against your signer. A lot of fraud takes place by family members either of a similar name (using their own IDs to mortgage their parents' properties) or a different name (using a grandparent's ID, which they have easy access to).
- Most states have one consistent background color that is always used for the photo picture (for example, California is blue). Know your state's background color and always look for it when checking IDs.
- Keep a current "ID Checking Guide" in your office for reference when out-of-state IDs are presented (available through the National Notary Association - www.nationalnotary.org - for about $20). An international version is also available, if applicable.
- Bend the ID slightly to confirm that it is properly laminated. The plastic shouldn't break or pop off.
- Check the consistency of the font/typeset used on the ID.
- Look at the back of the ID. Some fraudulent IDs actually have written on them, "This is a novelty item."
- Verify that the signature on the ID is the same as the signature on the document.
- Never accept a temporary license.
- Always keep your notary seal protected so it cannot be used by others, even if it's not required by state law.
- Always keep good journal records, even if it's not required by state law.
- Do not accept an acknowledgment on a document that is dated in the future. A document may be dated in the past (for example, documents may be dated two days ago that are being signed and acknowledged today).
- Do not, under any circumstances, pre-date an acknowledgment. In other words, the acknowledgment date must be the date someone actually signs the document in front of you.
- Many states prohibit notaries from acknowledging the signatures of family members. Even where permitted, however, it is not good practice to do so.
- Do not acknowledge your own signature.
- Do not acknowledge a signature on a document involved in any transaction in which you have a personal interest, even if it's not prohibited by state law. (For example, do not acknowledge the signatures of the buyers of your own home.) The notary should be a disinterested party.
- Use consistent practices every time you acknowledge a signature. For example, always ask for an authorized form of identification and write the identifying number in your journal, no matter how well you know someone, even if it's not required by state law. Using consistent practices and having thorough, consistent records is extremely important should you ever be asked to testify in court.
- If a husband and wife are both present, the husband cannot sign the wife's name, nor can the wife sign the husband's. It does not matter if a husband and wife are both sitting in front of you and the wife says, "He can sign my name; we do that all the time." It is never acceptable to acknowledge a person's signature when it was signed by someone else. Both people must sign the document and provide acceptable IDs.
- Only acknowledge a signature when you personally witness the signature being made. Even if a really good customer says, "I'm out of town, so send me the documents. I'll sign and return them so you can add the notary," it is not an acceptable practice to acknowledge the signature. If Mr. Jones is in the hospital and you are asked to acknowledge his signature, it is not an acceptable practice to call him to verify that he really signed the document before you acknowledge it.
Do your part in protecting the Company (and our customers) by consistently following good notary practices. Keep current with the notary requirements in your state by visiting www.nationalnotary.org.
- Customer approval does not justify deviation from good notary practices.
The Living Dead
Learn how a title manager saved the Company from a potential loss by recognizing a forged deed through the date of death recorded on a death certificate.
Barbara Braswell, one of our Company's finest title production managers, shares this story from the past. She was performing a title search for the sale of a vacant tract of land. The owner lived in Chicago and the property was located in Florida. The seller had received the property via quit claim deed from his mother a year earlier. Nominal consideration had been paid.
In the course of her search, Barbara discovered that the seller's parents had purchased the lot in 1966, even though the deed wasn't recorded until 1968. She also found the father's death certificate and realized that he had passed away in 1964 … two years before the deed was signed and four years before it was recorded! Either he had come back to life to purchase the land, or it was conveyed to a dead man!
Barbara investigated further and discovered the father was 80 years old when he died in 1964. When she did the math, Barbara realized that even if the mother had been a young bride, she would have been about 100 years old when she signed the deed just a year ago to her son. Based on her suspicion, Barbara required that the mother appear in one of our offices in Chicago to sign a new deed.
When presented with this requirement, the son admitted that his mother had died several years earlier and his sister had actually signed the deed. Barbara suggested that the son start a probate instead of continuing to break the law. Once the probate was complete, the vacant land was properly conveyed through our transaction to the buyer.
Moral of the Story
Barbara's skill and dedication as a title officer and part-time sleuth kept the Company from closing and insuring a fraudulent deed. Reviewing the documents in a chain of title is time-consuming, but crucial to the defense of the Company when all the facts of a transaction just don't add up.