FRAUD FIGHTER!

When Real Estate Goes Sideways

Presented by Kris McNamee | NexGen Title Agency, LLC

You hear about it at seminars. You are warned about it by underwriters. You just never think it can happen to you…until it does. You get an email that looks perfectly normal. There are no weird letters or symbols in the email address and it’s from a regular Gmail, Hotmail or Outlook account. A buyer wants you to handle their purchase transaction. “Of course," you say. "Please forward your contract and we will be happy to review the document and see how we can help you. Please feel free to call me with any questions."

No call comes, but a couple of days later, the email with the contract comes through. The sender thanks you, states that they need fees and to please let them know what else they need to set up the escrow…but there is no punctuation in the email…and the contract, while on the surface appearing normal, sets off warning bells.

Closer inspection of the contract reveals the buyer is from British Columbia. That, in and of itself, isn’t too odd, but then the seller’s address lists a mailing address of new construction--no actual address, just the model name, subdivision and city. More flags go up, so you take a closer look at the title.

A quick look at the assessor’s page reveals that the owner listed with the city is NOT the same name as the seller on your contract. Assessor’s pages do not always update as quickly as the land records, so further research is called for. No proof of death is easily found indicating the seller might be an heir, so you check the land records.

Now you have a problem. The last deed is into the same owner listed with the assessor and does NOT match the seller name on the contract. Uh oh! The deed lists that the husband died testate (with a will), so you pull up the will that was filed. More trouble. Heirs are listed, including the current owner on the deed who is the widow, and five other stepchildren--none of whom match the name on the contract.

It is time for some live research. Given the information on the documents filed in the land records, there is one attorney who appears to do a lot of work for the real owner of the property. You reach out to him, and he reaches out to his client who is most definitely NOT deceased. They also are not familiar with any of the names listed on the contract you received. YOU HAVE A CASE OF FRAUD!

Time to turn it over to your own attorney and count yourself lucky to have caught it. Not only were you able to alert the real owner, but you also never sent any account information for receipt of the earnest money deposit, which was mostly likely the end-goal for the fraudster. They were hoping to get your bank info, clean you out and disappear before you knew what had happened.

So, yes, it can happen to you. I have been doing this for almost 20 years and this is the first time I have personally had this type of fraud happen. ALWAYS be diligent. A real seller/buyer might be a little irritated with the questions, but in the end, they won’t mind because they know you are protecting them. If it doesn’t seem right, question it:

• The email received had no punctuation.
• The seller’s address was odd.
• The buyer was from outside the U.S.
• They NEVER called us despite the offer to speak with them, and never provided their owner phone number.

All of the above are red flags that you should ask questions before sending anything else to them. Our attorney has reached out to the FBI. Can they do anything, catch anyone? Who knows? I would like to think so. If we had sent wire instructions or account information, it could have been MUCH worse. I am also very glad we were able to get enough information to let the real owner know so they can be on the watch for it.