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Brian Peterson, an escrow assistant with Chicago Title Company's Danville, California office, received a payoff statement via e-fax on January 6, 2021, from a prominent loan servicing company.
On January 14, 2021, (completely unsolicited) another payoff statement was received by e-fax. Brian examined the second payoff statement thinking it was odd an updated payoff was received without anyone ordering it from the loan servicing company. Below is what he discovered on the second payment statement he received.
1st Page:
- Fax cover letter from a number printed as, "Fax Center 855-573-0894," (this is important to note).
- Fax cover mentions the mortgage broker and the Chicago Title Company file number.
2nd Page:
- Another fax cover sheet with a future date of 01/21/2021 referencing Chicago Title Company's fax number. This page is an exact copy of the first payoff statement cover letter, with the same time stamp, only the date has been changed from 01/06/2021 to 01/21/2021.
3rd Page:
- Loan servicer's phone number was changed by one digit, the loan servicer's fax number was removed and loan servicer's email address was missing.
- There were no changes in the payoff figures. These words at the bottom of the page were removed, "Please call the number listed on this form to update figures prior to remitting funds as they are subject to change without notice."
4th Page:
- Loan servicer's fax number and email address were missing.
- Bank account number on the bank wire information was completely different.
5th Page:
- Loan servicer's fax number and email address were removed.
This Chicago Title branch previously received an altered payoff statement on a different transaction. Brian looked at the altered payoff from the other file and discovered the, "Fax Center 855-573-0894," was the same number as shown on the payoff statement he was working on.
After comparing the two e-faxes, Brian notified his escrow officer, and the transaction was halted until the bank wire information could be validated on the first payoff and confirmed as fraudulent on the second payoff statement.
Brian's actions saved the Company from a potential significant claim. For his brilliant efforts, he has been rewarded $1,500.
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MORAL OF THE STORY
If your office receives a payoff statement from, "Fax Center 855-573-0894," it is an indication the original payoff has been intercepted and altered, in an attempt to illegally divert the payoff funds to a fraudster's account. The scary thing is, if the
funds were sent to the fraudster's account, the settlement agent would not know until the borrower's next monthly payment became delinquent — giving the fraudster more time to syphon off the loan payoff funds.
Just a reminder that verbal verification via a known, trusted number is required for all outgoing wires, except payoffs to institutional lenders (e.g., Wells Fargo, Bank of America, etc.) and repetitive wires made to previously verified accounts.
Verbal verification is always required when there has been a change in disbursement instructions, including the changing of bank information within a payoff demand.
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