Personal Dealings

By Lisa A. Tyler
National Escrow Administrator

This edition of Fraud Insights contains the usual incredible stories that enlighten real estate industry professionals month after month, with one twist – in this edition we discuss the dangers of personal dealings between escrow and title company employees in the real estate market. Read "Personal Dealings" to find out how an escrow officer managed to lose a big client, not by exercising bad escrow practice, but by failing to uphold her personal agreements with a home builder.

Since the implementation of our Document Execution Guidelines in 2005, the amount the Company has paid in forgery claims has dropped significantly. The change in policy coupled with tools such as the Notary ID Guides and the Fraud-Fighter™ machine have all been contributing factors in the decrease in fraud and forgery-related claims. As a matter of fact, fraud and forgery claims went from being the number one category from which claims were paid to the third category. The maker of the Fraud-Fighter™ machine updates Our Company annually with changes to the images that can be seen using black light on specific state-issued identification, such as drivers licenses. Discover the latest changes to identification cards by reading the "Black Light Update" article.

Update! In the December 2009 edition of Fraud Insights we featured a story about an operation in Colorado that had received a counterfeit check from a Canadian Bank for a closing in the amount of $725,000. Since that time we have received reports of the same type of scam in the states of California, New Mexico, Nevada, Oklahoma, Texas and Utah.

Here is a sample of one we received in California:

Click to Enlarge Click on check to view larger image.

This is just a reminder to demand funds be transmitted by wire transfer rather than deposit an out-of-country check even if it is written in U.S. Dollars. In the aforementioned story, entitled "Counterfeit Checks Plague Colorado," it took twenty days before the escrow branch was notified the item was counterfeit. That is valuable time wasted working on a file that won't close and valuable market time lost by the seller.



Personal Dealings

FNF's policies are clear. Employees should avoid personal and business dealings that might pose a conflict of interest. Although a conflict is not necessarily fraudulent, it could still come with a heavy price.

The following occurred in a small town where everyone knows everyone's personal business and deals are still done on a handshake. An escrow officer and her boyfriend decided to buy a house from a home builder that was one of her best and largest customers. The officer's boyfriend already had a loan on a house he intended to sell, so she bought the house in her name only and they moved in. Soon after they purchased the home the market took a turn for the worse and they were no longer able to make their mortgage payments. The escrow officer told the home builder (her customer and friend who she bought the house from) about her situation. The builder agreed to buy her house back and pay her loan off, then sell her another less expensive home she could afford. Keep in mind the market had taken a downturn.

After the swap of properties occurred the builder turned around and re-sold the first, more expensive home. He had to sell it for less then he sold it to the couple originally, which meant he would take a loss. Since the couple planned to marry, they would have two houses, so the builder and the couple made a deal. They agreed the builder would recoup his losses from the sale of the boyfriend's house and would wait until the house sold to be reimbursed. Everyone shook on it.

The couple moved into their new, more affordable home. The builder listed and sold the original home, upon which he took a loss of approximately $20,000. The couple confirmed they would pay the builder the difference once their other home sold and were married soon after.

Right before they left on their honeymoon the husband closed on the sale of his house, which was handled by the same company the escrow officer works for. Everyone in her company knew about the handshake deal she and her new husband had made with the builder, but the husband never gave his escrow officer instructions to reimburse the builder and all the proceeds were given to the husband. The builder knew of the pending sale. Remember, this is a small town.

When the builder learned the sale had closed, he tried to contact his escrow officer. It turned out she was out of the country on her honeymoon, so the builder went directly to her manager asking why he was not paid the money owed to him. The manager explained she was very sorry but unable to discuss the confidential file with him. He became extremely upset and spoke to every manager he could find, only to be told they were unable to discuss the sale with him.

End result, the builder pulled all of his business from that escrow officer and her company and moved it to an FNTG Company. The loss of his business forced his previous title company to shut down an entire branch. The escrow officer and her husband's business dealings affected the livelihoods of several other people.

Moral of the Story
When doing personal deals with customers, make sure you know the REAL price. There are a number of things that can go wrong and you would never want it to affect your neutrality or compromise your reputation. Keep in mind your actions could have a negative impact on your company and jeopardize your business relationship.



Black Light Update

Every year the folks over at UVeritech™, Inc. keep us up-to-date on which states include a UV ink image on drivers licenses. This year is no different. Here is the most recent list of UV images being utilized for state-issued drivers licenses.

AlabamaCurrent license: state's seal in UV ink on front. Prior license: no UV features
Alaska"Alaska" repeats on left and right edge of license and is visible under UV light
Arizona"Grand Canyon State" and state silhouette in holographic overlay with state seal; state seal is visible on front of license under UV light
CaliforniaMulticolor state flags will appear on lower front of license; usually three flags are visible under UV light
ColoradoState seal appears in UV ink for all licenses after July 2002
ConnecticutLicense number, holder's name, birth date and two lighthouses visible on front in UV ink
DelawareHolographic overlay with repeating pattern of horse and rider; state seal in UV ink on back
District of ColumbiaHas security overlay with "WASHINGTON DC" and "THE AMERICAN EXPERIENCE" visible under UV light
FloridaLarge photo ID license includes secondary ghost image and holder's last name visible under UV light. Smaller photo IDs will display State Seal and camera number overlapping photo plus vertical "FLORIDA"
GeorgiaCurrent license (2009): fine line background, front state seal and "Georgia" in OVI that glows under UV light. Prior license: no UV features
HawaiiCurrent license: "HAWAII" repeating across left and right edges of license and is visible under UV light. Prior license: repeated holographic overlay of a Hibiscus flower and "ALOHA STATE"
IdahoA holographic pattern of gold state outline and name visible under UV light; gold state seal repeats under UV light
IllinoisCurrent license: a portion of "ILLINOIS" repeating across the face of the license under UV light. Prior license: "A Safer State with .08" repeated across license
IndianaCurrent license: holder's name and birth date across bottom of larger photo visible under UV light. Prior license (2004): showed a pattern of torch and stars
IowaCurrent license: state name and flower repeating in overlay. Prior license: state name repeated in UV ink with final "IOWA" preceded by two stars
KansasCurrent license (2005): row of the state flower and "KANSAS" across the top – visible under UV light
Kentucky"THE BLUE GRASS STATE" visible under UV, repeating security feature of stylized "K" within a box and "KENTUCKY TRANSPORTATION CABINET" micro printed
LouisianaCurrent license has state seal repeating in full-color UV ink and optical variable device of state outline – fine line printing of heading
MarylandCurrent license (2004) has "Maryland" repeating across the face of the license
MassachusettsCurrent license: fine line background license and state seal repeating in UV ink. Prior license: pattern of "MA" repeating across the face of the license
MichiganCurrent license: enhanced fine line license and two state seals visible under UV light. Prior license: one state seal in center of license
MinnesotaCurrent license: holographic state seal under UV light. Prior license: holographic state name and snowflakes – loons visible under UV light
MississippiCurrent license: repetitive holographic pattern of state seal and "DPS"
MissouriCurrent license: outline of the state and "SHOW ME." Prior License: "MISSOURI" ran through the license and appeared under UV light
MontanaCurrent license: repeating pick and shovel in UV ink. Prior license: "MONTANA" repeated diagonally across license in UV light
NebraskaCurrent license: fine line license has "NE" from Nebraska fluoresces as well as a star on bottom right of photo under the UV light. Prior license: variable pattern of state name and seal appear under UV light
NevadaCurrent license: fine line background license and has repeating state seal under UV light. Prior license (2008): no UV features
New HampshireCurrent license: "New Hampshire" appearing twice vertically at left and right. Prior license: gold "New Hampshire" as same style as the heading and appeared under UV light
New JerseyCurrent license: driver's name and DOB in bottom half of large photo appears under UV light
New MexicoCurrent license: "NEW" and "MEXICO" diagonally across the center and a row of small squares are visible under UV light. Prior license: state symbol and state name appeared under UV light on back of license
New YorkCurrent license: two coats of arms will appear, one in center and a smaller coat of arms across the top of the photo, both visible under UV light. "NY" also repeats in rows across the back and is also visible under UV light. Prior license: one large coat of arms visible under UV light on front
OhioCurrent license: fine line background license and fluoresces state outline in upper right photo corner – both visible under UV light
OklahomaCurrent license: ghost image, state seal and Department of Public Safety seal also repeats under UV light. "Oklahoma" repeats in background on front of license
Oregon"Oregon" is diagonally repeated on front of license and is also visible under UV light
PennsylvaniaCurrent license: keystone outline enclosing "PA" repeating across the top and back, which is visible under the UV light. Prior license: fluoresce "Pennsylvania" pattern repeating on back – visible under UV light
Rhode IslandCurrent license has state flag emblem visible under UV light. OVD embedded pattern of "RIDMV" and state seal visibly in overlay
South Dakota"South Dakota" repeats in stylized script across front of license
TexasCurrent license: first of the three stars (on front in the data area) is fluoresce under UV light. Back of license includes a ghost image and birth date visible under UV light. Prior license: repeated "TEXAS" in metallic ink – visible under UV light
UtahCurrent license: fine line background license has "UT" repeating under UV light. Prior license: multiple state seals appear under UV light
VermontCurrent license: "Vermont" repeats diagonally across top and horizontally across bottom on front of license – visible under UV light
VirginiaCurrent license (2009): state seal, DMV logo and text visible under UV light. Prior license: no UV features
WashingtonUV-sensitive state seal image will appear across the middle of the license
West VirginiaCurrent license: green outline of state with yellow overlapping "WV" repeating across the middle, and a green and yellow state seal overlaps photo on the bottom left
WisconsinCurrent license: wavy stripes visible under UV light. Prior license: holographic pattern of state name and state seal, plus "WISCONSIN DEPARTMENT OF TRANSPORTATION" appeared under UV light
WyomingCurrent license: ghost image that appears under UV light. Prior license: repeated pattern of "Wyoming" on front of license – visible under UV light

Only six states do not have a hidden UV ink image, which is only visible when the ID is placed under a black light. This is all the more reason settlement agents should ensure their offices are equipped with the UV-16 Fraud-Fighter™ machine. By placing the identification under the black light in the Fraud-Fighter™ machine, settlement agents can detect IDs that might be fraudulent. This tool is crucial in the fight against forgeries and is the most basic of coverage afforded to buyers and lenders who receive a title insurance policy. For more information on what to do if a fraudulent ID is discovered, refer to the June 2009 or September 2008 issues of Fraud Insights. These issues are posted on the Company's intranet at under Internal Publications.

If you don't have the UV-16 Fraud-Fighter™ machine in your office, contact UVeritech™, Inc. at 800.883.8822 or visit their Web site at Don't forget to ask for the FNF rate.