UV Detectors

By Lisa A. Tyler
National Escrow Administrator

"Sandbagging" is a story of deception involving a short sale lender. A builder had the opportunity to sell his property to a municipality due to severe flooding in the county, but he couldn't hold on long enough for the deal to close before losing his property to foreclosure. Find out how this clever builder manipulated the short-pay lender by finding a short-term investor to purchase the property and then sell it back to the builder. More importantly, read how our title insurance agent detected the fraud, and sent the builder and his deal away.

Through Fraud Insights we continue to provide tips and tools to our readers on how to detect fraudulent identification at signing. In the article "UV Detectors" we provide an updated list of the security features on state-issued identification cards provided by UVeritech™. The update is extremely timely since this year we have handed out 228 black lights to our Awesome Escrow Training live conference attendees who have chosen to sit in the front row. Now those winners will know what to look for when viewing identification with their new prize!





In June 2008, Jefferson County Wis. was hit with severe flooding. Since many homes were left damaged beyond repair, the Flood Mitigation Assistance Program provided funding to purchase damaged homes from the homeowners. Unfortunately, this story is an example of how one person tried to defraud Jefferson County to avoid foreclosure.

Fidelity Land Title, Ltd., a title agent for Chicago Title Insurance Company, contracted with the acquisition company representing Jefferson County in purchasing the damaged homes. Fidelity Land Title's contract included preparing title commitments on each property being purchased by the county.

One of the commitments prepared by Title Officer Julie Barnhart in August 2010, was on a property owned by a local builder. The chain of title revealed the previous owner was the builder's mother, a local real estate agent. There were several judgments against this owner, the mortgage was in default, the lender had begun foreclosure proceedings and a judgment against the mother was still attached to the property.

In March 2011, a Jefferson County representative asked Fidelity Land Title to bring the title commitment up-to-date. Julie prepared the update. The title search revealed the property had transferred on November 10, 2010. Another title company had closed and insured the transaction. Satisfactions had been recorded for the mortgage and most of the judgments. Only two judgments remained; one against the son and the other against the mother.

The updated title report was sent to the Emergency Management Department at Jefferson County. Shortly thereafter, Julie received a phone call from the builder's mother who confirmed the property was sold in November 2010. The mother went on to explain the judgments against them were false and the other title company had accepted affidavits in order to issue their title policy. Since the mother and builder had common names, Julie did not question the other title company's actions. What Julie did question was why the mother was calling, when the property was already sold to someone else.

That same day a Jefferson County representative called Julie. The county representative apologized for the owner who should not have called her directly. Then the representative asked Julie if the owner told her the whole story. Julie was still confused as to why the county representative was referring to the mother as the owner.

Jefferson County was in receipt of an unrecorded land contract. The vendor was the new owner who purchased the property in November 2010. The vendee was the previous owner – the builder – and the land contract was drawn up and notarized by the builder's mother, a local real estate agent. Guess what date the land contract was executed? November 10, 2010 – the same day the buyer sold the property.

Julie asked for a copy of the land contract for review. She started to put all the pieces of the puzzle together. It turns out the builder had a mortgage on the subject property in the amount of $187,600. The lender had begun foreclosure proceedings and the deal with Jefferson County wasn't proceeding quickly enough. The builder was going to lose the property to foreclosure so he convinced an investor to purchase the property from him through a short sale. The investor paid $100,000 for the property when he purchased it on November 10, 2010.

The same day the investor sold the property back to the builder for $232,000 under an unrecorded land contract. The builder intended to sell the property to Jefferson County under the Flood Mitigation Assistance Program for $244,000. Out of the proceeds the builder intended to pay the investor $177,000. Apparently the county was still willing to purchase the property but the title had to be back in the name of the builder. The representative at the county had plans to record the land contract, a deed in fulfillment and then a Deed from the builder to the county.

Julie decided to review the file with Chicago Title Insurance Company Underwriting Counsel. Together they agreed it would be better to allow the other title company to close and insure the sale from the builder to Jefferson County. In the meantime, a representative from the other title company called Julie, at the urging of the builder's mom, to see if she needed anything from them in order to close. Julie explained they had decided not to insure and instead referred the deal to the other title company, as they insured the most recent sale. Julie did mention they should ask for a copy of the land contract.

Next, Julie called her customer at the county to let him know she would not be able to insure this deal. A couple of days later, she received another phone call from the other title company thanking her for telling them about the unrecorded land contract. The builder's mom, the real estate agent, had called them to ask about insuring the deal with the county. They asked the real estate agent about the land contract. There was a long pause and then the real estate agent replied by saying, "What land contract?"

Clearly there was some funny business going on. The builder, who sold the property through a short sale, stood to gain from the sale to the county by re-acquiring the property through a land contract on the same day he sold the property. Additionally, there were still some outstanding judgments which needed to be cleared up. Instead of putting Fidelity Land Title and Chicago Title at risk Julie decided to pass on this deal. For her efforts she has been rewarded $1,000.

Moral Of The Story
Short sales are supposed to assist property owners who sell their homes in a down real estate market, when they owe more than the current market value. The seller should be working hard to get the best price they can. A short sale is not supposed to be about getting the buyer the best deal possible. In this instance it appears the borrower might actually gain from the sale to the county – funds which probably should be applied to the shortage on his payoff. And, depending upon the terms of the short sale agreement, the short pay lender might have the right to re-attach their lien based on the fraud perpetrated by the parties to the transaction.


UV Detectors

UVeritech™ has provided an updated list describing the UV security features visible when using a "Fraud Fighter™" UV detector. Many of our offices use the Fraud Fighter. For those of you who don't know what the machine does, it helps to detect counterfeit identification.

Below are samples of what the UV security features look like on the driver licenses issued in the states of Washington, Wisconsin and Alabama:




All but five states in the country issue identifications which contain a UV security feature. The five states without a UV security feature on their identification cards are Arkansas, Maine, North Carolina, North Dakota and Tennessee. The list below describes the security features for all other states.

AlabamaCurrent: UV ink of state's seal will appear on front plus state seal will overlap upper right corner of photo.
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 visible on front of license under UV light.
CaliforniaCurrent license: under UV light a second ghost image will appear above the B&W portrait and birth date will vertically appear across the large color picture. Licenses prior October 2010: multicolor state flags appears (usually three can be seen) on lower front of ID.
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. On back repeating state name inside the state outline is visible under UV light.
DelawareCurrent fine line license: a second ghost image on right will appear under UV. Prior license: holographic overlay with repeating pattern of horse and rider; state seal in UV ink on back.
District of ColumbiaSecurity overlay with "WASHINGTON DC" and "THE AMERICAN EXPERIENCE" visible under UV light.
FloridaLarge photo ID license: secondary ghost image and holder's name visible under UV. Smaller photo IDs displays state seal overlapping photo plus "FLORIDA" repeats under UV.
GeorgiaNew 2009 IDs (fine line background) front state seal and "GEORGIA" in optical variable device that glows under UV light. Prior IDs contain no UV security features.
HawaiiCurrent license: "HAWAII" repeats across left and right edges of license and is visible under UV light. Prior: repeating 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 with small ghost image: a portion of "ILLINOIS" repeats across the face of the license under UV light. Prior license: "A Safer State with .08" repeats across license.
IndianaNewer licenses: a second ghost image, holder's name, birth date across bottom of larger photo visible under UV light. Prior IDs show a pattern of torch and stars.
IowaCurrent license: state seal visible under UV, capitol dome and "IOWA" appear twice in overlay. Prior license: state name repeats in UV ink, with final last "IOWA" preceded by two stars.
KansasCurrent license has row of state flowers and "KANSAS" across top under UV.
Kentucky"THE BLUE GRASS STATE" visible under UV, repeating security feature of stylized "K" within a box and "KENTUCKY TRANSPORTATION CABINET" micro printing.
LouisianaCurrent license: state seals repeat in full-color UV ink visible under UV light. Also optical variable device of state outline; fine line printing of head bar.
MarylandCurrent small head ghost image license: "MARYLAND" repeats across the face under UV.
MassachusettsCurrent license: fine-line background license. State seal repeating in UV ink with a perforated state outline overlapping top of ghost image.
MichiganCurrent enhanced fine line license: 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 has holographic state name and snowflakes; loons visible under UV light.
MississippiCurrent license: state seal and "DPS" appear under UV light.
MissouriCurrent license: outline of state and "SHOW ME" appear under UV light. Prior license: "MISSOURI" running through license appears under UV light.
MontanaCurrent license: grizzly bear in overlay and repeating pick and shovel appear in UV ink. Prior license: "MONTANA" repeats diagonally across front of license in UV light.
NebraskaCurrent fine line license: "Ne" from Nebraska fluoresces under UV light as well as state seal in data area and star on bottom right of photo. Prior license: variable pattern of state name and seal appear under UV light.
NevadaCurrent fine line background license: state seal changes colors as license is tilted and is also visible under UV light. Prior license (2008) no UV features.
New HampshireCurrent license: "NEW HAMPSHIRE" appears twice vertically at left and right under UV. Prior license gold "NEW HAMPSHIRE" in same heading style repeats on front and visible under UV.
New JerseyCurrent license: driver's name and date of birth appear in bottom half of large photo under UV light.
New MexicoCurrent license: "NEW MEXICO" diagonally across the center and a row of small squares are visible under UV light on bottom. Prior: on back of license state symbol, state name and state outline appear under UV light.
New YorkCurrent license: two coats of arms will appear, one in center visible under UV light and a smaller coat of arms across top of photo. Also "NY" repeats in rows across the back visible under UV light. Prior license: one large coat of arms under UV light on front.
OhioCurrent fine line background license: state outline in upper right photo corner fluoresces under UV light.
OklahomaCurrent license: ghost image; state seal and Dept. of Public Safety seal also repeat 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: has keystone outline enclosing "PA" repeating across top and visible under UV light; also "PA" repeats on back in UV light. Prior license: "PENNSYLVANIA" repeats on back under UV light.
Rhode IslandCurrent license has state flag emblem visible under UV light. Optical variable device embedded pattern of "RIDMV" and state seal visible in overlay.
South Carolina2011 - Current fine line background: palmetto tree appears green under UV light. Prior IDs no UV features visible.
South DakotaCurrent license: a second ghost image on right and "SOUTH DAKOTA" appear under UV light. Prior license: "South Dakota" repeats in stylized script across front of license under UV light.
TexasCurrent license: the seal and the first of the three stars on front will fluoresce under UV light, on back ghost image and birth date visible under UV light. Prior license: repeating "TEXAS" in metallic ink and is visible under UV light.
UtahCurrent fine line background license has "UT" repeating under UV light. Prior license will display multiple state seals under UV light.
VermontCurrent license: "Vermont" appears and repeats diagonally across top and horizontally across bottom front of license under UV light.
VirginiaCurrent license has state seal, DMV logo and text visible under UV light (2009), prior license has no UV features.
WashingtonCurrent license: image of state seal appears across middle license visible under UV light.
West VirginiaCurrent license: green line of state outline with yellow overlapping "WV" repeats across middle, green and yellow state seal overlaps photo at bottom.
WisconsinCurrent license: wavy stripes visible under UV light. Prior license has a holographic pattern of state name and state seal. "WISCONSIN DEPARTMENT OF TRANSPORTATION" appears under UV light.
WyomingCurrent license: a second ghost image, holder's name and birthday will appear under UV and on back "bucking horse" visible under UV light. Prior license repeating pattern of "WYOMING" appears under UV light on front of license.

If you do not have a Fraud Fighter in your office, you do not have the ability to check the ID presented. The Company does have a discounted rate available through UVeritech. Call them at 800.883.8822 or visit their Website at www.fraudfighter.com to order your Fraud Fighter. Be sure to let them know you are part of the FNF Family of Companies.