Notary Nitwit

A mobile notary failed to have an Occupancy Affidavit signed by the borrower. The escrow officer gave the mobile notary the affidavit and asked her to go back to the borrower to have it signed. Instead of returning to the borrower's residence to have the document signed, the notary signed it herself!

James Stott, an escrow officer from Lawyers Title Company in Ventura County, Calif., requested a mobile notary from Bancserv to perform a signing at a borrower's residence. The transaction was a $610,000 refinance that involved the signing of many loan documents. The notary assigned to the case was Kimberly Monica Gonzales.

Kimberly performed the signing and promptly returned the documents to James. James reviewed the documents while packaging them to return to the lender. During his review he found an unsigned Occupancy Affidavit and sent it to Kimberly with instructions to return to the borrower's residence to have it signed. Kimberly apologized for her oversight and agreed to have the affidavit signed.

Kimberly later faxed a copy of the signed and notarized affidavit to James in an attempt to help meet the rate lock deadline. Apparently, she didn't have time to get it signed the previous night when James originally made the request and had to fax it to him the following day to expedite funding.

James reviewed the affidavit and recognized it as a clear forgery. The borrowers were a married couple and their signatures on the affidavit looked nothing like the signatures on the other loan documents. Unbeknownst to Kimberly, she had just forged the signature of a superior court judge as well as his wife's!

James ordered another notary from Bancserv and had the affidavit signed by the real borrowers. Then he went one step further and contacted his escrow administrator who reported the incident to Bancserv. The management team at Bancserv immediately removed Kimberly from its list of registered notaries and reported the incident to the Secretary of State, the regulator of notaries in California.

When the swift acting management team at Bancserv questioned Kimberly about her actions she claimed it was always her intent to get the true signatures before sending the original document and that she even went as far as to call the borrower for an appointment the evening after the forged document was faxed. Of course at that point another notary had already been assigned.

Then the administrator notified the Company's field compliance team who promptly removed Kimberly from the Company's approved notary list.

For James' attention to detail and for not turning a blind eye to the forgery, the Company has rewarded him $1,000. His detection of the forgery was nothing short of heroic, and the fact that he had the fortitude to do something about it to save the Company from a future claim is impressive. We all know it would have been easier and faster to accept the affidavit and forward it on to the lender, but he didn't. The Company admires James for his integrity.

Escrow Officer Returns From Retirement

A fraudster hacks the e-mail account of a retired escrow officer to open a sale transaction and obtain a $530,000 loan. The fraudster would have pulled off the perfect scam had it not been for the keen eyes of a title examiner.

Patrick Crews, a title examiner from Chicago Title's Ventura County, Calif. operation, was working on files that were recorded on an extremely busy day. He picked up a file for a sale transaction with a price of $980,000. Patrick noted the property was free and clear. The closing was being handled by an independent escrow company from an area unfamiliar to Patrick. This particular file had been opened a week prior as a rush order. The order had been transferred from another title company at the insistence of the private party lender (a long time customer of Chicago Title's).

The lender was worried about funding to a title company he didn't know and was more comfortable dealing with Chicago Title, even though the buyer had a $400,000 earnest money deposit in escrow. At first the parties to the transaction put up a fight, but the lender said he would pull out of the deal unless the transaction transferred to Chicago Title.

The recording package was received by special messenger that afternoon. While Patrick worked on the file he noticed that the signature on the grant deed did not match signatures on documents recorded previously in the chain of title. He went on about his work performing an index search on the grantor's name. He also ran a name search on the notary who witnessed the signing of the grant deed. The notary was an employee of a postal type storefront. Patrick was highly suspicious.

Patrick escalated the file to the title officer and explained that he suspected the grantor's signature on the deed had been forged. The title officer proceeded to e-mail the escrow officer who worked for the independent escrow company and ask for a new grant deed to be executed by the seller at a Chicago Title office in the presence of an employee. The title officer received an unusual e-mail response from the escrow officer saying that she was declining to close the escrow due to suspicious activity. No further details were provided in the response.

The title officer contacted the lender to notify him of the escrow officer's response and to return the lender's $530,000 wire. The lender in turn tried to contact the escrow officer but was unable to get through using the phone number listed in previous e-mails to him. The lender attempted to contact the buyer and seller at different numbers, but received the same voicemail message for each number.

The lender then decided to contact the owner of the property through the telephone directory, rather than through the number provided by the buyer and seller's representative. The property owner confirmed the suspicions of Patrick, the title officer and escrow officer's when he told the lender the property was never listed for sale and that he knew nothing about an opened escrow.

The lender immediately contacted the FBI to report the situation. The FBI referred the lender to the local Sheriff Department's Real Estate Fraud Unit. The Sheriff's Department tried to locate the escrow officer, but found she had long since retired. Apparently, her e-mail account had been hacked by the scam artist and the phone numbers provided to the lender to contact the escrow officer, buyer and seller were actually prepaid cell phones all held by the same individual. The detective assigned to the case also called the notary and discovered the notary's stamp had been copied and the notary signature was a forgery.

The detective confirmed that the independent escrow company was unaware of any possible escrow transaction and that the fraudsters likely obtained the name of their retired escrow officer from their corporate Website. Using the escrow officer's e-mail account, the fraudsters opened the title order with another company and later with Chicago Title Company. Through the escrow officer's e-mail account they confirmed receipt of a $400,000 deposit that didn't even exist!

The fraudsters nearly pulled off the perfect scam. They would have taken ownership of a property worth nearly a million dollars and encumbered it with a lien for $530,000. If it weren't for Patrick's detection of the forged deed and for escalating his suspicions to the title officer, the fraudsters would have made off with nearly $530,000 in proceeds. As a result, Patrick has been rewarded $1,000 as well as a letter of recognition from the Company. It would have been easier to accept the deed and record it by ignoring his intuition, but he didn't. As a result, Patrick saved the Company from a monumental loss.

Moral Of The Story
The detective told the title officer and Patrick that he was worried that the fraudsters might attempt to sell the house out from under the owner again using another fake escrow until they were successful. As a result, the title officer posted the property address to the title plant records to make sure this doesn't happen again and any title provider working on this particular property will be notified of the potential for fraud.

The real lesson of the story is that once an employee leaves the Company, his/her e-mail account should either be immediately shut down or re-directed to another employee to constantly monitor. Had the independent escrow company shutdown the retired escrow officer's e-mail account, it could not have been hacked!

New California License

The California Department Of Motor Vehicles (DMV) added new security enhancements to its driver's license and identification cards. Beginning in September 2010, the State of California began issuing driver's license and identification cards containing new security features. The last major revision made to these cards was in 2001. Since the DMV issues more than 8.25 million driver's license and identification cards each year, it is important Our Company has the tools to make sure these cards are safe, authentic, secure, and accurate.

The information on the new driver's license and identification cards is the same as the previously issued cards but is presented in a new format, which improves readability. The format of the card issued to individuals under 21 will be vertical and those over 21 will be horizontal. This serves as an aid to retailers and law enforcement in easily identifying the age of the cardholder.

Additional enhancements are:

• Tactile features – The signature is laser engraved so it can be felt by touching it.
• Raised birth date – The date of birth (DOB) will appear in two places, and DOB appearing across the photo will be raised so that it can be easily felt when touching.
• Name – Every cardholder's name will appear on two lines. The first line will contain the cardholder's last name and the second line will include the cardholder's first and middle names.
• UV image – The cards will contain an image visible only under a UV light. The image will be a duplicate of the cardholder's picture.
• California Bear – An outline of the California Bear will be visible from the front of the card when a flashlight is pressed against the back of the card.
• 2D Bar Code – The bar code appears on the back of the card and includes the same information from the front of the card.

For complete details and samples log on to the California Department of Motor Vehicles Website at: http://www.dmv.ca.gov/dl/dl.htm.

"The new security features, coupled with advanced technology, make California driver license and identification cards one of the most secure identification documents in the country," said DMV Director George Valverde. All driver's license and identification cards issued prior to September 2010 will remain valid until the expiration date printed on the card. Cardholders who wish to have a new card before their expiration date may do so for a fee.