Absentee owners of real property are often the target of criminals who pose as the owner – offering a home or property for sale or as collateral for a new loan. These imposters sell the property and abscond with the sale proceeds or strip any equity in the property with a new loan. The real property owners have no idea that their property is the subject of a real estate transaction. Our agents can take steps to prevent this fraud from happening by following just three steps.  

Step 1 – Assume It Is Fraud 

Compare the mailing address provided by the seller or borrower to the address on the tax bill, where available. This should be done prior to opening the order for a Commitment for Title Insurance. If the address is different than the address provided to you by them, their real estate agent, or the lender, or no address was provided, send a letter via overnight delivery to the address on the tax bill. A sample Notice of Pending Real Estate Transaction is attached to this Bulletin. 

CAUTION: In some instances, the fraudster may have changed the mailing address with the tax collector. When possible, contact the tax collector to determine whether a change of address was submitted recently.   

If the property is located within a common interest community with a homeowner’s association (HOA), contact the manager or management company to verify the contact information of the seller. Also, verify the seller’s identity by obtaining the seller’s phone number and clear copies of the seller’s Driver License, Identification Card or Passport. Carefully scrutinize any I.D. provided. You can also contact your account manager to discuss other available, third party, identification verification tools.

Step 2 – Verify, Verify, Verify 

Demand that the seller attend a virtual meeting via Microsoft Teams or Zoom. Be certain that they understand that their file will not be processed unless they attend. If the seller is an imposter, s/he will likely come up with successive excuses for why s/he cannot attend the meeting.  

Once in the meeting, require the seller to turn on his/her camera. This can be done on a smart phone, laptop or desktop. Ask the seller simple questions such as:1) When did s/he acquire the property and for how much? 2) Why is s/he selling? 3) Where does s/he reside? 4) Why is the tax bill sent to a different address? 5) What is that address? 6) Who did s/he buy the property from? 7) What is the condition of the property?

8) What type of property is s/he selling? 9) Ask them to show you I.D. by having them hold it up to the camera and be certain to view the backside or cover to confirm is it valid.

Keep in mind the answers do not have to be exact. For example, if they say they acquired the property the second half of 2002 and the year is correct, that may be a better answer than the exact date of October 9, 2002. These questions are only suggestions. Depending on the answers, you might ask more appropriate questions. Remember, the object is to determine if they are the true owners of the property. Never email the questions to them in advance because they will research the answers and be ready for the virtual meeting. If they are unavailable to speak virtually, resign from the transaction.  

Step 3 – Our Best Line of Defense 

At signing, adhere to Underwriting Bulletin 2005-RC-04A - Fraud Prevention – Loan Releases and Document Execution (attached). Also adhere to the Company’s Document Execution Guidelines (Underwriting Bulletin 2015-RC-04). There are no exceptions to these policies. Fraudsters succeed in stealing the property from a legitimate owner when they convince the settlement agent to let them use their own notary. At closing, do not accept an assignment of proceeds. Be certain the proceeds are paid to the seller of record only. 

If you determine that the seller an imposter, immediately resign from the transaction. Follow Tech Memo 96-2008 How to Resign from a Transaction (attached). Should you need additional assistance prior to closing, do not hesitate to contact underwriting or your account manager.

Also attached to this Bulletin is ALTA’s Tip Sheet on Seller Impersonation Fraud.

Letter Notice of Proposed Transaction

Underwriting Bulletin 2005-RC-04 - Fraud Prevention - Loan Releases and Document Execution

Underwriting Bulletin 2015-RC-04 - Document Execution Guidelines

ALTA Tip Sheet - Seller Impersonation Fraud

This Bulletin will be on the National Agency website under the Agent Alerts and Memos.

(THIS EMAIL IS INTENDED FOR THE AGENTS AND DIRECT OPERATIONS OF THE FIDELITY NATIONAL TITLE GROUP AND IS NOT TO BE FORWARDED WITHOUT THE EXPRESS WRITTEN CONSENT OF FNTG.)

Your Wisconsin FNF Agency Underwriting Team

Lisa Petersen

lisa.petersen@fnf.com

Direct: 262-796-3865

Duane Wunsch

duane.wunsch@fnf.com

Direct: 262-796-3852 

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