Be Thankful These Weren’t Your Transactions!

By Lisa A. Tyler
National Escrow Administrator

Thanksgiving is a time for giving thanks, and after reading this month’s edition of Fraud Insights, you’ll be thankful that the transactions featured here were not yours! Read about how some amazing closers acted upon red flag warnings in their transactions to uncover forgery, fraud and other crimes.

The heroic acts of the employees named in these three stories did not go unrecognized. Each escrow employee received a $500 reward in addition to our eternal gratitude for their extraordinary efforts to protect the Company, the public and the lenders we serve from fraudulent transactions.

The $1,500 we spent on employee rewards this month is nothing compared to the dollars we would have lost in legal defense had the transactions closed and we insured the buyers and lenders. Regardless of whether a claim against our Company is valid or not, we spend an average of $12,000 per claim in legal fees defending our Company. Other than increased market share, we have nothing to gain when closing a shady deal – but we have a lot of money to lose, especially since the average premium collected on our transactions is not even close to $12,000.

Keep your radar on and be sure to share your next incident of crime with the rest of the Company by submitting your details to

We now have Fraud Insights available in glossy print form! If you would like printed copies of this newsletter, please submit your request to us at The printed version of the newsletter is a great way to spread the word to your customers about the proactive measures we take to protect our Company, our customers and the public from crime.


Miami Vice

Like the undercover cops from Miami Vice, a Florida escrow closer used her detective skills to solve a mysterious case of fraud.

Toni Hitchens, one of the Company’s finest escrow closers from Cape Coral, Florida, received a new sale transaction earlier this year that seemed odd from day one. The property was located in Cape Coral, but the mortgage broker, selling broker and buyer were all located in Miami, a hotbed for real estate fraud.

At the insistence of the suspicious Cape Coral listing broker, the transaction had transferred from a closing attorney in Miami to Toni. She called the law offices to have the earnest money deposit transferred to her new escrow file. Much to her surprise, the person who answered the phone did not say, “The law offices of … ,” but instead answered, “Home Funding,” the name of the mortgage broker in her new transaction! Toni stated her reason for calling and the person on the other end of the phone simply took a message for the so-called closing attorney.

Prior to closing, Toni received a contract addendum that indicated an increase in the sale price of the property from $315,000 to $399,000, instructing escrow to pay the difference of $84,000 to Miami Lakes Consultants. The $84,000 was to be paid in consideration for construction and remodeling.

Based on the previous strange happenings, Toni looked up licensed businesses in Florida and could not find a company named Miami Lakes Consultants. The mortgage broker in the transaction did appear as the owner of a company by a similar name, Miami Lakes Specialists.

Toni kept a log of the strange facts that were occurring in this transaction. On the day of closing, Toni received a loan package from Orange, California. She reviewed the package and decided to contact the buyer at his place of employment. The buyer’s application indicated he had worked for the same company for the past four years, but when Toni called the business number, the responder said that no such company existed at that number.

To make matters worse, the previous closing attorney still had not transferred the buyer’s deposit. Toni was fed up! She contacted the lender and relayed all of the aforementioned facts. The lender was extremely thankful to Toni. The lender immediately revoked the loan, faxed instructions for Toni to return the loan documents and then “blacklisted” both the appraiser and the mortgage broker from further dealings with the company.

Toni and her management team took action to protect their offices and sister companies in the Tampa District from doing business with these shady characters again. Here are the steps they took:

  1. Searched names in their plant records for previous transactions with the intent to audit any previously closed transactions involving these people.
  2. Posted the names of the individuals and the companies to the plant records for the benefit of all title insurers.
  3. Started a “blacklist” of their own that is circulated among all FNTG underwriters to ensure that our Company never does business with these people or entities again.

The Company appreciates everything Toni and her Tampa District management team did to protect their operation and the Company from closing and insuring this transaction. Toni has been rewarded $500 for her extraordinary efforts.


Closer Loses Faith in Church Deal

Find out how a closing agent in Savannah, Georgia used multiple red flag warnings to derail a crime involving church members.

Korinne Zebrowski, a superior closing manager based in Savannah, Georgia, received a closing request from a man we will refer to as “Mr. POA,” who was acting as a “representative” of the seller (not a real estate agent). Mr. POA said the seller was an investor who did not attend closings and he would sign as attorney-in-fact for the seller. When Korinne attempted to coordinate the execution of the seller’s Power of Attorney in her office, Mr. POA said the Power of Attorney had already been executed and the original would be provided to Korinne at closing.

After Korinne received the sales contract from Mr. POA, she began the process of opening the file and ordering the title report. However, when she called the phone number listed for the seller, she realized it was Mr. POA’s cellular phone number! When Korinne asked Mr. POA for the seller’s fax number, he asked that she forward any faxes to him instead. Korinne really became suspicious when she called the buyer and Mr. POA once again answered. He claimed that he was “helping out” both the buyer and seller, and requested that Korinne send the buyer’s information sheet to him as well.

Korinne was very concerned that Mr. POA was defrauding the lender by representing himself to be the buyer. Using the reverse address look-up feature on, Korinne performed searches on the buyer’s name and Mr. POA’s phone numbers. All searches led to a single address for a church located in Liberty County, Georgia.

Korinne was determined to find out if the buyer knew about the transaction. At Korinne’s request, the lender provided images of the buyer’s canceled rent checks. Korinne noticed that they were all drawn on an account for a local chapter of the same church under which Mr. POA’s phone numbers were listed. It appeared that the buyer was claiming to live and work at the same address as the church. In addition, one of Korinne’s co-workers, who is a criminal paralegal, pointed out that all of the rent checks were made payable to an individual notorious for his involvement in organized crime in Georgia.

Korinne immediately called the lender and asked if she had ever actually spoken to the buyer, since the entire application was completed via telephone and fax. The lender insisted she had. But when Korinne asked which contact number she used to reach the buyer, the lender read Mr. POA’s cellular phone number.

Korinne told the lender that the number was Mr. POA’s and advised her to be extra diligent when researching this buyer because someone might be trying to commit mortgage fraud. Korinne then asked the lender to fax the buyer’s loan application and driver’s license to her.

But what Korinne discovered next was most unsettling: Mr. POA’s signatures on the mortgage application and the title contract as attorney-in-fact for the seller matched the seller’s signature on the recorded Power of Attorney exactly! But to be absolutely sure she was looking at a forgery, Korinne looked up a deed signed by the seller using It was definitely not the same signature that appeared on the contract or the Power of Attorney. She also noticed the transfer tax stamp on the most recent deed of record reflected the property had been purchased for only $76,000 just six weeks prior to the new contract of $125,000.

Korinne reviewed the signatures on the faxed copies of the buyer’s loan application and driver’s license and compared them to the buyer’s social security card. While the signatures on the driver’s license and social security card matched each other, they did not match the signatures on the loan application or contract. The lender never even noticed this discrepancy. It was blatantly obvious that Mr. POA had forged signatures for both the buyer and the seller on more than one document and had misrepresented himself as the buyer.

Despite the parties’ relationship with a church, Korinne was quickly losing faith in this transaction. She finally spoke to someone who claimed to be the buyer. While he was aware that his identity was being used in the transaction, he didn’t know the address of the property or the name of his lender!

Korinne highly recommended that the lender find a reason not to close this loan. The closing attorney contacted Mr. POA and told him the Company would not close the transaction without meeting both the buyer and seller in person and examining their photo identifications in our office. The closing attorney also required that the Power of Attorney be executed in our office.

To Korinne’s relief, the closing died. The final nail in the coffin, per the lender’s request, was telling Mr. POA that the loan was not approved because the current owner had not held title long enough. To Korinne’s further relief, she never heard from Mr. POA again.

Moral of the Story

Being denied direct contact with the parties involved in a transaction is always a red flag. Korinne knew she works in a state where an obscene amount of real estate and mortgage fraud takes place; no lender or attorney’s office is immune. People intent on committing real estate fraud are banking on the closing office being too busy to discover what they are up to.

While researching the matters discussed in this story might sound time-consuming and burdensome, Korinne’s efforts all took place in a day’s work. For her diligence, Korinne received a $500 reward from FNTG!


Straw Buyer Deal Goes up in Flames

An escrow officer was able to stop loan fraud on four files because she paid attention to the red flags. Count the warnings as you read along and see if you recognize any red flags from your own transactions.

Bertha Keating, an escrow officer with Fidelity National Title of Pinal County, Arizona, had four files with contracts showing the same seller and the same buyer (“Mr. Deceit and/or nominee”) with terms for new purchase money loans. When Bertha’s assistant called to get the assignee information, Mr. Deceit provided the names of the assignees – the same Mr. and Mrs. Straw Buyer on all four files (first red flag).

A "straw buyer" is someone whose credit is used to purchase a property and secure financing. Sometimes this person cooperates willingly, and sometimes this person is the victim of a questionable transaction or identity theft.

Now back to the story … when Bertha’s assistant called Mr. and Mrs. Straw Buyer with questions regarding their transactions, they told her they needed to talk to Mr. Deceit first and would call her back with answers to our questions (second red flag). Bertha noticed third party deposits were always made by Buyer One with no instructions or request for reimbursement (third red flag).

When it came time to have the documents signed on the first closing by Mr. and Mrs. Straw Buyer, Mr. Deceit called Bertha and was very upset that she was going to schedule a Company-approved notary to sign Mr. and Mrs. Straw Buyer, saying that he wanted to use his own notary (fourth red flag).

A notary was sent to sign Mr. and Mrs. Straw Buyer. She left without taking signatures because Mr. and Mrs. Straw Buyer did not approve of the loan documents and fees. New loan documents were drawn and a second notary was sent to sign Mr. and Mrs. Straw Buyer. Each time Mr. Deceit was present and asked the notary to leave the room for a few minutes so he could talk to Mr. and Mrs. Straw Buyer alone (fifth red flag). When the notary came back into the room, Mr. and Mrs. Straw Buyer and Mr. Deceit were very cold and short with the notary. Mr. and Mrs. Straw Buyer did not speak English; Mr. Deceit interpreted. The notary only showed them where to sign (sixth red flag).

The loan and closing documents were signed and returned; however, Mr. and Mrs. Straw Buyer refused to sign the HUD because they did not agree with the figures and did not remit the funds due to close at that time. The package was returned to the lender, and Bertha contacted Mr. and Mrs. Straw Buyer to find out when they were sending in their closing funds. They told her to contact Mr. Deceit, who was going to pay the closing funds (seventh red flag).

Bertha explained to Mr. and Mrs. Straw Buyer that she needed funds from them and not Mr. Deceit, as he was no longer the buyer under the contract. They evidently called Mr. Deceit, who then called Bertha, again being very rude. He blurted out that he was really the buyer. (Oops - he slipped!) Bertha began asking him questions: If you’re the real buyer, then why aren’t you going into title? Why aren’t you getting the loan? Why did you nominate someone else to take title? Mr. Deceit tried to back-peddle on his earlier confession, but it was too late.

Bertha’s escrow radar was on high alert and she contacted her escrow administrator for advice. Bertha was not comfortable closing this transaction and did not want to proceed with the other three files because she recognized too many red flags and knew, by his own admission, that Mr. Deceit was using straw buyers and might be engaged in loan fraud. Bertha’s escrow administrator contacted the lender and insisted on speaking to the underwriter or president of the company. The escrow administrator informed the president of the lending company that Mr. Deceit admitted to using straw buyers, and that Mr. and Mrs. Straw Buyer were not using their own funds. The lender opted not to fund the loan at that time and the deal went up in flames.

When Mr. Deceit called Fidelity National Title to get the status of funding, Bertha referred him to the lender because she had not received loan proceeds. After following executed cancellation instructions, Bertha never heard from the parties of these transactions again.

Moral of the Story

There are multiple red flag warnings in a shady transaction. Look for successive red flags and then act in accordance with your manager’s advice. Bertha received $500 for paying attention to the red flag warnings and engaging her manager’s assistance.