We鈥檙e honoring agents who played a critical role in safeguarding buyers and sellers throughout 2024.
It is famously said that 鈥渃rime doesn鈥檛 pay.鈥� Unfortunately, in the digital age, the opposite is often true. Fraud is a major problem in our industry, and a sad reality that many title agencies have to deal with. Yet a lot can be done to stem the tide and prevent financial and reputational harm. One strategy that 海角吃瓜黑料 has deployed quite successfully is its Crime Watch Program. As The Independent Underwriter for the Independent Agentsm, 海角吃瓜黑料 collaborates with its agents and incentivizes their efforts to detect, deter and prevent crime. The program has been very successful over the years, preventing millions of dollars of monetary loss. Continuing our New Year鈥檚 tradition, let鈥檚 review the 2024 program data and explore additional steps agents can take to foster a safer industry.
A persistent challenge
As we wrote last year, the problem of fraud within the title insurance industry is not going away. New digital tools are making the scammers鈥� job far easier, and victims often wind up paying a high price. Reporting from the previous year suggests Americans are defrauded out of billions of dollars every year due to wire fraud. The Senate Banking Committee recently wrote, for example, that those consumers lost approximately $10 billion in 2023 鈥� up 14% from the year before.[i]
An all-of-the-above approach
Of course, as any seasoned agent knows, there are numerous strategies that can increase transaction safety and mitigate risk. Some of these include:
Whenever possible, speak with clients directly to better confirm their identity.
Deploy cybersecurity best practices like encryption to protect the integrity of wire instructions.
Take a communicative and collaborative approach within your agency to ensure that critical details are never missed and that more people are looking out for relevant red flags.
Stay apprised of the latest cybercrime schemes that fraudsters are using to steal money and harm transaction stakeholders. Currently, one of the most common schemes is seller impersonation fraud. You can read about it in this great blog by 海角吃瓜黑料鈥檚 Chief Claims Counsel.
Continue educating yourself and your agency co-workers by taking advantage of continuing education classes offered through platforms like .
Leverage fraud prevention technology platforms. Solutions like can play a powerful role in reducing transaction risk.
Remember that if something feels off with a transaction, it probably is. Always trust your gut, your experiences and your expertise.
Underwriter + agent = A united front
In addition to the strategies outlined above, participating in 海角吃瓜黑料鈥檚 Crime Watch Program can help agents protect themselves, their businesses and their customers from fraud. The program rewards 海角吃瓜黑料 agents to the tune of $1,000 each time they successfully stop a fraudulent transaction from going forward, thereby reducing the cost of claims. It also encourages agencies to work closely with their 海角吃瓜黑料 underwriters when a suspicious transaction arises. Often, fraudsters will be less successful in pulling off a scheme if there are multiple sets of eyes on the transaction.
A crystal-clear impact
As last year鈥檚 Crime Watch data shows, this is clearly an effective approach to stopping fraudsters. In 2024, 海角吃瓜黑料 agents prevented liability exposure of $5,075,000. Title agents stopped seller impersonators, prevented illegal fund diversions and recognized cashier鈥檚 check scams. Here鈥檚 the list of agents and agencies recognized by 海角吃瓜黑料 for their fraud prevention efforts as part of the Crime Watch Program in 2024. We thank each of them for their dedication and commitment to promoting a safer industry.
Lone Star Title Company of El Paso, Inc.
Recipient: Joe Fernandez
Texas Secure Title Company, LLC
Recipients:
Gretchen Wright
Renee Hicks
Ashley Cleveland
Lizzie Angle
Professional Land Title Company
Recipient: Debbie Dicus
Manatee Title LLC
Recipient: Nikki Vantilburg
Matthews & Matthews, LLP
Recipient: Tammie Fleming
People’s Title, LLC
Recipient: Lara Burris
Alpha Title Guaranty, Inc.
Recipient: Joshua Carter Randol
Providence Title Company
Recipients:
Melissa Mutchler
Kathy Montes
Karla Allen
Cathy Bennet
McGill Escrow & Title, LLC
Recipient: Debbie Bello
Asbury Land Title, Inc.
Recipient: Jessica Taylor
Burke Law and Title LLC
Recipient: Beth Henry
Brick City Title Insurance Agency, Inc.
Recipient: Janeil Campbell
Suncoast One Title – Port Charlotte
Recipient: Jill Barberine
Select Title & Escrow, LLC
Recipient: Patricia Moore
First International Title, LLC
Recipient: Lucy Gomez
Keep fraudsters off balance in 2025
As a new year begins, now is the perfect time to recommit yourself and your agency to stopping fraud. This can seem like a tall order given the scope of the problem. Adhering closely to best practices and collaborating with your underwriter, though, are important ways to make progress toward this goal. 海角吃瓜黑料鈥檚 Crime Watch Program is a prime example. It highlights how the best path forward is the one where we all work together.
Want to learn more about 海角吃瓜黑料鈥檚 Crime Watch Program? Start here.
If there is one thing real estate and title insurance professionals know, it鈥檚 that fraud is a massive problem. In fact, nearly 3 in 4 firms reported in 2023 that they had experienced an increase in seller impersonation. The serious threat has long been on the radar of the folks who work at Texas Secure Title Insurance Agency. 鈥淲e put the security of our transactions at the top of our priority list. This is a shared responsibility 鈥� from the time the file opens until it is closed,” said Renee Hicks, Vice President of Operations.
Having a collective commitment to security paid off recently when Texas Secure confronted two suspicious real estate deals. By adhering to their tried-and-true policies, they foiled the fraudulent transactions and were recognized by the 海角吃瓜黑料 Crime Watch program. Let鈥檚 look at what happened during each transaction.
Well-founded caution
Texas Secure鈥檚 title examiner was already on high alert when they began working on the first of the two fraudulent transactions, as it was vacant property. Their caution soon proved well founded. Worrisome details emerged during the initial examination process. When the examiner searched for more information about the owner, they found a court history littered with fraudulent deeds. One of these deeds shared the same notary public and GF number as the deed involved in Texas Secure鈥檚 file. The transaction鈥檚 deed had also been submitted by the owner and not the title company 鈥� a peculiar feature that further indicated the deal was likely fraudulent.
Teasing out the connections
The second fraudulent transaction also had clear red flags, including a possible connection to the first property described above. 鈥淭he Affidavit of Heirship used had a 鈥楪F Number鈥� that looked like those used in the fraudulent deeds our examiner had seen the day before,鈥� Hicks explained. The fact that the property was conveyed outside of the title company was another strike against it.
Digging into the details, Texas Secure found that the property owner had allegedly signed a 鈥淭exas General Warranty Deed鈥� in 2022 to another party and filed an Affidavit of Heirship (AOH) for someone deemed to be his wife. By utilizing the online database 鈥淔ind a Grave,鈥� Texas Secure cross-referenced the name of the owner鈥檚 wife and discovered that the owner had died in 2018 鈥� meaning that he could not have signed the deed, and that the transaction was fraudulent. Corroborating this further was that signatures on the deed and the AOH did not match.
Always adhere to policy and protocol
鈥淚t can be tempting to bypass certain standards, steps, or protocols to save time or because of long-standing relationships with other real estate or financial professionals,鈥� said Hicks, reflecting upon the fraudulent transactions. 鈥淗owever, our team understands the impacts to all stakeholders when proper protocols are not followed. There is more at stake than closing the deal.鈥�
Indeed, Texas Secure鈥檚 experience during this ordeal is a crucial reminder of how important it is to scrutinize each aspect of a given transaction. Moving methodically and always adhering to protocol is key to combatting fraud, preventing future claims, and most importantly, protecting transaction stakeholders from becoming victims.
A never-ending fight and a worthy payoff
Texas Secure鈥檚 story also speaks to the frustrating, albeit necessary, fight against fraud within the title industry. As Hicks remarked, 鈥淲ill we ever be able to eliminate fraud? Of course not! However, we as an industry can rally together and have each title professional accountable for carrying out the necessary steps to secure real estate transactions.鈥�
While there may never be a cure-all for this endemic problem, adhering to company policies, staying mindful of industry best practices, and remembering the stakes involved for property buyers and sellers can make a major difference.
And as Hicks highlighted, the emotional payoff for doing so can be tremendous. 鈥淚t is rewarding to know the efforts and time we put into continuously creating new policies and procedures to safeguard our company and our underwriters is paying off,鈥� she said. 鈥淥ur examiner, Lizzie Angle, was especially excited. She felt her daily efforts were validated. Thorough, accurate and proper examination is part of the defense strategy against fraudsters.鈥�
Want to learn more about the 海角吃瓜黑料 Crime Watch program or submit your agency鈥檚 story. Check out the details here.
With fraud rising across the title industry, it鈥檚 important to watch for both red and pink flags.
While working on a recent vacant lot transaction, Tirey Smith and Joe Fernandez of came to a similar conclusion about the property鈥檚 seller: something was up. Sure enough, their intuition soon proved right. The transaction鈥檚 seller was indeed a fraudster. By stopping the fraud, Smith and Fernandez became the latest honorees of 海角吃瓜黑料鈥檚 Crime Watch program, receiving $1,000 for their efforts.
Long before deeming the transaction fraudulent, Lone Star Title had been having trouble with their supposed seller. For one thing, they found it challenging to connect with the individual via phone. 鈥淭his was very unusual because our voice messages usually get a call back, but in this transaction, the seller wouldn鈥檛 call back,鈥� said Smith and Fernandez. 鈥淪he only communicated through emails, including with her own agent!鈥�
However, a lack of communication was the tip of the iceberg. From the beginning, the transaction raised numerous questions. As a vacant lot, the property was assessed to have a low tax value. Yet at the same time, it carried several liens 鈥� including one for a substantial amount of $15 million. Additionally, the Deed of Trust for this lien revealed that the seller had used the property as collateral for an equipment loan. Smith and Fernandez indicated that several other notes for equipment loans existed and were connected to the $15 million loan.
The agents thankfully recognized several of the entities listed as the note鈥檚 borrower, as Lone Star Title Insurance had done business with them in the past. Because of this connection, Smith and Fernandez were able to speak directly to their point of contact. They confirmed that his wife鈥檚 name was the same as their seller鈥檚, that she owned the property in question, and that the property had been given as collateral for the equipment loan.
While all of this checked out, other aspects of the transaction did not. The two agents determined, for instance, that the wife of their contact had an email address that did not match what they had on file. Perhaps most importantly, they discovered that her property was not actually listed for sale. The supposed seller became pushy when later confronted by these facts. She also behaved suspiciously by not wanting to go to the title company to sign and floating the idea of getting their own notary. At this point, Smith and Fernandez determined they had seen enough. They stopped the transaction from going forward and began informing all relevant parties of what had occurred.
鈥淭here is a certain feeling of satisfaction when you [help] stop a fraudulent transaction from happening,鈥� said Smith and Fernandez, reflecting on the experience. 鈥淸We were] proud that this fraudster couldn鈥檛 get one by us.鈥� This perspective is reflected in the larger culture of Lone Star Title Insurance, which has invested significantly in education to ensure that agents are adequately equipped to detect and prevent fraud. Yet as Smith and Fernandez pointed out, cutting down on fraud in the title insurance industry requires a broader approach. All industry stakeholders must come together to stop bad actors and lower the cost of claims. 鈥淧rograms like 海角吃瓜黑料鈥檚 that tackle fraud prevention are both helpful and necessary for the protection of the title agent and the client,鈥� they said.
In short, these programs act as an additional incentive for agents to remain watchful throughout the lifecycle of each transaction, which, according to Smith and Fernandez, can make all the difference in the world. 鈥淭he only way to guard against fraud is to stay vigilant, ask questions, and always trust your 鈥榞ut,鈥欌�� they said. 鈥淒on鈥檛 ignore [any] red flags 鈥� or pink ones for that matter!鈥�
By staying vigilant, Smith and Fernandez exemplified what the title industry can be at its best. It is a critical vanguard that protects property rights and makes a positive and tangible difference in the lives of its customers. 鈥淭he agents and the actual owners of the property were very surprised and grateful that we had paid close attention to what was happening on the seller鈥檚 side of this transaction,鈥� they said, echoing this sentiment.
Are you an 海角吃瓜黑料 agent that has stopped a fraudulent transaction from moving forward? Learn more about our Crime Watch program!
As borrowers struggle with increased prices for almost everything, it鈥檚 no surprise that making monthly mortgage payments has also been an issue. In the last few years, it has been reported that foreclosures have steadily increased.[1] Thus, lenders have sought to exercise their rights granted under either a mortgage, security deed, or deed of trust to force a sale of the collateral due to the non-payment of the debt.
In many cases, whether it is a purchase money loan or a refinance, the lender may purchase and obtain a loan policy of title insurance to protect the lender鈥檚 interest from a variety of covered risks.
As a lender prepares to initiate a foreclosure either by a judicial foreclosure or a non-judicial foreclosure, it may run a title search on the property to determine ownership along with other liens, judgments, encumbrances, and easements involving the property and the borrower. Title matters that present themselves involving the validity, enforceability or priority of the insured mortgage lien that were not excepted or excluded from coverage, and occurred prior to the date of the title policy, may lead the lender to submit a notice of claim to the title insurer seeking a coverage determination under the title policy.
The top seven title issues submitted by lenders to the 海角吃瓜黑料 claims team include:
Unreleased prior lien or mortgage;
Spousal marital status is missing or is incorrect on mortgage;
Spouse does not execute the mortgage;
A notary acknowledgment issue;
Error in the legal description or the legal description is missing;
The mortgage was not timely recorded; and
A complete copy of the mortgage was not recorded (i.e., missing a page).
Happily, strong post-closing procedures and attention to detail can easily prevent each of these issues. Let鈥檚 look at a scenario and use it to analyze a few different situations.
Scenario
An unmarried couple 鈥� we鈥檒l call them the 鈥渂uyers鈥� 鈥� enter into a purchase contract with John Doe (the 鈥渟eller鈥�). The sale is scheduled to occur in 30 days. The buyers let you know that they are so excited as they are getting married in two weeks and that this is going to be their first home. The seller has two mortgages or deeds of trust on the property, as well as a recorded monetary judgment. All are properly indexed in the county land records. The parties are ready to close on schedule.
First situation: Thirty days later, the buyers are now married; however, the prepared deed to vest title to the buyers, and the new mortgage or deed of trust shows them as unmarried. What do you do?
Of course, one should not proceed with having the documents executed until they are corrected to reflect the proper marital status as of the date of closing. It is also important to mention here that one should also verify the proper names of the parties (including business names, trust, etc.), and that the names are correctly spelled.
Second situation: The closing occurs. The documents are executed but the notary misses acknowledging one of the pages in the mortgage or deed of trust for one of the buyers. The instrument is then recorded.
In this case, it鈥檚 important to have the mortgage or deed of trust re-executed, re-acknowledged and then recorded in the county land records. However, in some states, there may be an option to have the notary execute a Notary Affidavit. Check with your state to see if the latter is available and the cases for which it is appropriate.
Third situation: The closing occurs. The instruments are not sent to the county land records for recording until 60 days later.
Because of the delay in recording, it鈥檚 possible for another interest holder or lienholder to record an instrument in the 鈥済ap period,鈥� the time between the closing date and the recording date. Keeping the gap period small lowers the risk that someone else will record an instrument that could challenge the lender鈥檚 priority.
Fourth situation: The closing occurs. The lender prepared the mortgage, and it identifies that an Exhibit A will be attached to show the property鈥檚 legal description. The mortgage is recorded without Exhibit A being attached.
In this case, it鈥檚 important to promptly have the mortgage or deed of trust re-executed, re-acknowledged and attach Exhibit A with the legal description; and then record in the county land records. In a few states, there may be an option to remedy the matter with a correction affidavit. Check with your state to see if the latter is available.
Fifth situation: The closing occurs, and the funds are disbursed. No additional review or follow up with the prior lenders or judgment creditor is conducted for the recorded release or satisfaction of the lien. One year later, these have not been released in the county land records. The current lender is now foreclosing, and the new foreclosure title search shows the items as unreleased in the county land records.
We understand that there may be challenges in getting the respective party (lender or creditor) to record a release or satisfaction if it is on that party to do so; however, this is part of the post-closing process. Being persistent and diligent will help ensure that the county land records accurately reflect the status of the mortgage or lien. There are several states that have enacted statutes that impose on lenders and creditors a prescribed time limit to record a release after payment. Also, in a few other states, a title company or a title insurer may have the ability to execute a release if certain requirements are met and if the lender or creditor fails to do so. Check with your state to see what options are available.
As you can see, title companies can impact the lender鈥檚 foreclosure process in a big way. By taking the time to catch the 鈥渓ittle鈥� things, you can help reduce the likelihood of claims submitted by lenders under loan policies.
If you have any questions, we鈥檙e here to help! Please feel free to reach out to me at: mhawkins@alliantnational.com.
Resources:
Bates, M. (2024, April 11). ATTOM: Foreclosure Filings Increased 3 Percent in Q1.
Fabino, A. (2024, March 13). Map Shows States Where House Foreclosures Are Rising. .
This blog contains general information only, not intended to be relied upon as, nor a substitute for, specific professional advice. We accept no responsibility for loss occasioned to any purpose acting on or refraining from action as a result of any material on this blog.
[1] Bates, M. (2024, April 11). ATTOM: Foreclosure Filings Increased 3 Percent in Q1
, a full-service title insurance agency, is a loyal member of the Ocala, Florida, business community and dedicated to protecting the integrity of its customers鈥� transactions. This commitment served them well recently when a fraudulent transaction came across the desks of two of the agency鈥檚 title professionals. By working together and proactively communicating with other transaction stakeholders, the agency foiled the fraudster and received recognition through 海角吃瓜黑料鈥檚 crime watch program, which offers a $1,000 reward to agents who help prevent a fraudulent transaction from closing.
A suspicious package
When the package first arrived from the buyer, Brick City Title鈥檚 Gina Preston and Cherie Breitenbecker felt like it was a step in the right direction. For some time, their agency had been attempting to collect a deposit from a cash buyer of a residential property who claimed to be conducting the deal through a trust.
Any positive feelings quickly dissipated, however, once they opened the parcel. While the sales contract for the transaction was included, there was no form of currency. Instead, the buyer had tucked several postal stamps inside the package.
Alarm bells
Naturally, receiving such a bizarre item immediately set off alarm bells for Preston and Breitenbecker, especially since Brick City Title had repeatedly clarified to the buyer about which forms of payment the agency could accept. 鈥淚f we feel or suspect anything unusual, we dig into available resources to resolve any possible fraudulent dealings,鈥� said Preston, reflecting upon the incident. The next step for both professionals was to get on the horn to the buyer鈥檚 agent and reiterate which forms of payment were permissible 鈥� including a bank wire or a cashier鈥檚 check. A three-way call between the agent, Brick City Title and the buyer followed shortly after.
Any title agent who has been in Preston鈥檚 and Breitenbecker鈥檚 shoes will likely be able to predict what happened next. The buyer was incensed about being called out for the package and that Brick City Title was asking for more information about the trust involved in executing the transaction. After some back and forth, the buyer clammed up and ended the call. Preston, Breitenbecker and Brick City Title then took stock of what happened. A consensus quickly emerged that the whole transaction was highly suspect. The experience of other parties in the transaction further supported this view, with both the agent and seller having their own misgivings about the buyer鈥檚 behavior and demeanor.
The final step taken was to send the transaction materials to 海角吃瓜黑料 and to subsequently cancel the transaction 鈥� much to the relief of all involved. 鈥淭he seller wasn鈥檛 surprised this buyer was fraudulent,鈥� said Preston when discussing the aftermath, 鈥渁nd was glad that we uncovered what we found and cancelled the transaction so that [they] could move on.鈥�
Lessons learned
As with any fraudulent transaction, the experience of Brick City Title provides important takeaways. It showcases how agents must not only adhere to their companies鈥� policies and procedures but also follow their gut instincts. In this case, the buyer鈥檚 behavior alone was a clear red flag. 鈥淚 had a couple of conversations with the buyer and the conversations were not pleasant,鈥� Preston explained. 鈥淭his person had a very demanding and insulting demeanor which put me on guard.鈥� Brick City Title鈥檚 experience also highlights how successful anti-fraud efforts are bigger than the actions of a single party. Instead, having a strong working relationship with every transaction stakeholder is the key to safe and secure transactions.
Through interfacing with its partners in the transaction, Brick City Title gained additional information that backed up their original assessment. The transaction was indeed fraudulent, and the way it was prevented is an essential reminder of how stopping fraud requires all hands on-deck.
