This article initially appeared on: https://fraudinsights.fnf.com/vol18iss05/article2.htm
Escrow Officer Kim Rafael and Escrow Assistant Liz Manges from Fidelity’s Napa, California office, received a For Sale by Owner (FSBO) order on property in Southern California. The order was opened by the buyer via email.
The property was a residential three-bedroom, three-bathroom villa in Pacoima, California. The sale price was $490,000 and the contract called for a one day closing with a Canadian buyer who was supposed to send a $49,000 earnest money deposit.
Kim and Liz pulled a copy of the latest recorded deed and noticed the owner’s name did not match the seller’s name on the purchase and sale agreement. Kim and Liz reached out to the purported seller and asked why the name on the deed did not match the name on the agreement.
The seller told them in an email response she was using a Power of Attorney to sign on behalf of the record owner. Kim and Liz asked for a copy of the Power of Attorney and inquired why it was being used. The seller’s response was that was “a personal question” and to hurry and deposit the earnest money.
Kim and Liz were suspicious. They looked up the address for the “seller” as reflected on the purchase and sale agreement. Their internet search indicated the address as Stanford University. They knew something was not right and did not open the escrow.
Instead, they sent the Notice of Pending Real Estate Transaction via overnight to the property address in Pacoima, which was also the address where the property tax bills were being mailed.
The true owner called first thing the next morning to confirm that she had no knowledge of a purchase contract for the sale of her home. The owner’s broker also reached out to Liz to confirm the property was not for sale and stated this was the second attempt by the same imposter to sell the property out from the true owner.
The Company is appreciative Kim and Liz stopped the transaction before it ever opened. For Kim’s and Liz’s efforts they were rewarded $750 each and received letters of recognition.
|MORAL OF THE STORY
Absentee Owner Fraud is occurring nationwide. Operations are opening sales with imposters daily and many of them are not immediately sending a letter to the tax bill address. Instead, they spend hours and days working on files only to figure out later the seller is not the true owner of the property being sold. Unfortunately, they regularly find out by accident. Had they sent the letter out immediately, they most likely would have found out within 24-48 hours.
It is also important the true owner is properly identified. By asking a series of questions, operations can arrive at the identity of the person with whom they are communicating. For more information about the methods used to identify the seller, contact firstname.lastname@example.org.
Strict adherence to the Company’s Document Execution Guidelines is the best way to avoid becoming a victim. Never let a seller (or any party to a transaction) bully you or convince you to let them use their own notary.
Should you have any suspicions, share them with the notary to ensure the notary fully identifies the signer. Better yet, demand the signer personally appear in your office.
While writing this issue, we received reports from several states that some imposters are changing the mailing address where the tax bill is sent, PRIOR to selling the property out from the legitimate owner.
Contact the tax collector office to find out if the property which is the subject of a transaction you may be handling had a recent address change or not. If yes, contact your local management or email@example.com for additional instructions.