First Anniversary Edition

By Lisa A. Tyler
National Escrow Administrator

You ate, drank and were merry – but now it’s time to make those New Year’s resolutions! Top on your list should be joining the more than 15,000 people who read Fraud Insights every month. This is the first anniversary edition of Fraud Insights, and keeping in tradition with past editions we are addressing a current and important issue affecting the industry: home ownership in the U.S. by resident aliens (immigrants).

Home ownership programs for resident aliens have become increasingly popular in the industry; our settlement agents have seen more and more resident aliens presenting immigration cards at the closing table. Find out if this type of identification is valid in your next closing by reading “Green Card – It’s Not Really Green!”

Read “Altered Deed Does Not Go Unnoticed,” by Dena Hernandez from Fidelity’s Phoenix operation, to find out how she used the Company’s Document Execution Guidelines to protect the Company and herself from future losses and claims due to a forged disclaimer deed.

Be a hero like Pat Darrall from Chicago Title’s Phoenix operation, who single-handedly detected three fake I.D. cards in less than two months! Find out how in “Flea Market Drivers’ Licenses.”

Welcome to a whole new year of fighting crime and keeping our industry free from fraud and forgery. Make it your goal this year to be like Dena and Pat! They received $500 each as a small token of the Company’s appreciation for the efforts they made in preventing crime in their own transactions. E-mail your heroic stories to us at or call us with the details at 888.934.3354.

In addition to the insightful stories found in Fraud Insights, be sure to sign up for Spectacular Escrow Training in your area, where you will be educated on complex real estate matters and learn how to detect fraud in your next transaction. For training events in your area, visit and click “Trainings.” If you don’t see a training event in your area, keep checking back, or send a message to to request an event.


Green Card – It’s Not Really Green!

The identification card formerly known as the “green card” used to be printed on green paper and as a result took on the name. However, it is no longer green and hasn’t been so since 1977!

A United States Permanent Resident Card, most commonly known as the “green card,” is an identification card for a permanent resident of the United States of America who does not have U.S. citizenship. It is proof that the holder has permission to permanently reside and take employment in the U.S.

The name “green card” comes from a predecessor form I-151, which was printed on green paper. When the Permanent Resident Card was adopted in 1977, the card was not green, but the name “green card” nevertheless stuck. The card is issued by the U.S. Citizenship and Immigration Services (USCIS), a division of the U.S. Department of Homeland Security.

The Permanent Resident Card now features the U.S. Department of Homeland Security seal on the front, prominently mentions the “Department of Homeland Security” on the back and has enhanced security features. It has a full-face picture (instead of showing the left ear of the resident), fingerprints and personal data on the front. American law requires that the card, which has a 10-year-term, be carried by permanent residents at all times because they are still classified as aliens.

Cards issued prior to 1977 remain valid until the expiration date listed on the card, or until recalled by USCIS.

In 2003, USCIS produced and distributed more than 2.5 million Permanent Resident Cards. In July 2006, the USCIS estimated there are approximately 10 to 12 million permanent residents in the United States. This has spurred a new market for real estate lenders and developers, which in turn has increased our exposure to new risks. Make sure you are protected from fraud by being aware of the following issues:

Is it safe for settlement agents to use the Permanent Resident Card for identification purposes?
Yes. However, even though the Permanent Resident Card is accepted in all states as a valid form of identification, extra precautions should be taken to validate the identity of the signer. The current I.D. card does not have the signature of the person and the risks are currently greater with a Permanent Resident Card due to rampant immigration fraud. The fraud is conducted by using fake supporting documents and lying on the initial application.

What is our policy for closing when an illegal resident is involved?
An illegal resident may hold title to real property like anyone else. The title is insurable, with no special exceptions, even if you know the party’s immigration status. You are not legally obligated to report immigration status to law enforcement. If you learn that a party to the transaction is an illegal resident, extra care is required to verify the identity of the signing party. Many illegal residents use forged drivers’ licenses.

Before closing, be sure to verify the I.D. card’s authenticity using the National Notary Association’s “2006 I.D. Checking Guide,” a publication providing considerable information for all states about various I.D. cards.

For further questions or assistance on this matter, please contact National Escrow Administration at or 888.934.3354.


Altered Deed Does Not Go Unnoticed

A less than honest wife alters a deed after it had been notarized, but our experts catch it and save the day!

Dena Hernandez, an escrow officer from Fidelity National Title’s Phoenix, Arizona operation, was in the midst of processing a refinance transaction involving a husband and wife. The lender on this particular transaction required the husband to relinquish all rights, title and interest in the property.

When the wife appeared in Dena’s office to sign the closing documents, she asked if she could take the disclaimer deed to her husband for his signature. The wife informed Dena that there was a notary on the premises where her husband resided - a prison!

Dena accommodated the borrower’s request and provided her with the disclaimer deed, instructions and a notary’s affidavit. Days passed before the wife delivered the executed documents, along with a copy of her identification (an Arizona driver’s license) and her husband’s identification (a Permanent Resident Card).

While Dena prepared the documents for recording, she noticed the notary had acknowledged both the husband’s and wife’s signatures on the deed, even though only the husband’s signature was required. Dena also noticed that the signatures appeared to have been altered. She called the notary listed in the information contained in the notary’s affidavit and asked if she could fax the notarized document for review and validation.

As suspected, the notary stated that the signed deed looked nothing like the original. The wife had told the notary that she was the only one who needed to sign the deed. She then signed it in the notary’s presence, who notarized her signature.

After the wife left the offices of the notary, she had changed her signature on the deed to her husband’s signature and had added his name to the notary acknowledgement and notary’s affidavit. The husband and wife each had six letters in their first names and 10 letters in their last name. Their names were highly unusual and not gender-specific. Dena could have easily overlooked the crime, but the wife was extremely sloppy in her alterations: she had written over them with a pen, making the changes very apparent. Also, the notary’s affidavit clearly stated that a separate affidavit must be completed for each signer, but the copy Dena received contained both the husband’s and wife’s names.

Dena has since sent another disclaimer deed directly to the prison for execution (no pun intended) by the husband.

Moral of the Story
Always thoroughly inspect documents that are executed outside of our offices. Documents executed in the presence of a notary that is employed by a state or federally-run facility, such as a prison, are exceptions to our Company’s guidelines. It is the escrow officer’s responsibility to verify that the notary is a state or federal employee at the institution.


Flea Market Drivers’ Licenses

Flea Market Drivers’ Licenses, also known as “Park ‘n Swap” licenses, are on the rise – and now there are Flea Market Resident Alien Cards!

Pat Darrall, an advisory escrow officer from our Chicago Title offices in Phoenix, Arizona, was obtaining signatures on a transaction where the purchaser did not speak English. The purchaser’s real estate agent said he would translate. The agent had proper identification and signed the Interpretation Affidavit.

The buyer presented an Arizona driver’s license as proof of identification. Upon examination, the expiration date was not the buyer’s birthday, as it typically is. His picture also appeared fuzzy and stretched out – similar to when children put silly putty on the comics in newspapers and elongate the image. (Pat later verified with the Department of Motor Vehicles that the license actually belonged to a woman.)

Pat requested a second form of identification and was given a Resident Alien Card. This appeared to be valid until she stepped out of the conference room and examined it with a magnifying glass. Pat could tell from the Resident Alien Card that the purchaser had been in the United States for 18 years. She therefore found it odd that he did not speak any English.

Pat continued to review the card and noticed that a portion of the information on the back was obscured by a brown film, which looked just like Kodak film. Closer review revealed that the numbers and dates under the film did not match the front of the card. Pat simply told the purchaser and agent that she could not notarize the documents because there appeared to be a problem with the license. The purchaser and agent left the office.

They returned the next day with another license, also a “Park ‘n Swap.” The picture and signature were vastly different from the previous license. Pat again refused to notarize, informing the mortgage broker that the identification was unacceptable and she would not close the transaction. Pat informed the funding lender of the situation, who was extremely grateful the possible forgery was caught.

Pat caught another fake identification card in the same week. She went to a branch office and was asked to help return a funding package that had been signed by an approved outside signer. She reviewed a copy of the identification and found that the dates were not consistent with Arizona standards. Furthermore, the picture was fuzzy, the background color was wrong and the signatures on the license and documents did not match. She contacted the Department of Motor Vehicles and discovered the license did not belong to the person whose name appeared. Once again, Pat notified the lender, agents and the signer. The signer did not get paid for his service.

The third “Park ‘n Swap” identification was presented in November at one of our Phoenix branch offices. The purchaser presented a suspicious-looking identification to an approved signer. In checking with the Department of Motor Vehicles, Pat learned it was not the purchaser’s license – he was using a Social Security number of someone who was born before him! We declined to close the transaction; it transferred to another title company for closing.

Moral of the Story
By taking extra precautions with your notary and documents signed outside of our offices, you are helping to protect the Company from losses due to forgery. Here are some tips for detecting false identification:

  • Pay attention to physical descriptions, especially age, weight and eye color, and verify them against your signer. (A lot of fraud is committed by family members with similar names.)
  • Most states have one consistent background color that is always used for the photo on a driver’s licenses (for example, Texas’ is blue). Know your state’s background color and always look for it when checking identification.
  • Keep a current "I.D. Checking Guide" in your office for reference when out-of-state I.D. cards are presented. (The guide is available through the National Notary Association for about $20. An international version is also available, if applicable.)
  • Bend the I.D. slightly to confirm that it is properly laminated. The plastic shouldn't break or pop off.
  • Check to be sure the font or typeset used on the I.D. is consistent.
  • Look at the back of the I.D. Some fraudulent I.D. cards actually state right on them, “This is a novelty item.”
  • Verify the signature on the I.D. against the signature on the document.
  • Never accept a temporary license.