Vacant Property and Foreign Owners Fraudulent Scheme
Whether your customer has owned property for years or just purchased property, you know these property owners are not immune from being a potential victim of real property fraud. With the use of technology and access to real property records, property owners are reporting a number of fraud cases. One type of fraud being reported involves foreign property owners. The typical target owns an unencumbered, vacant parcel of land and has an out-of-country mailing address listed in the county records. Fraudsters are most likely finding these properties by searching the county records to identify a potential victim.
Here’s one recent fraud scenario: Months after a sales transaction closed, the title company was advised by the insured of a potential fraudulent sale of a vacant parcel of land which was owned by a foreign investor. An investigation revealed that the sale of the property was fraudulent. The conveyance deed was allegedly notarized by a notary employed at the U.S. Consulate General office in Johannesburg, South Africa. The Consulate General’s office confirmed that there was no notary by that name employed at their office. The owner of the property, who resided in Columbia, confirmed that the property was not for sale.
A few Red Flags we have identified while administering these types of claims include:
- Vacant land sales;
- Vacant parcels that have been owned by the same owner for several years;
- Non-local owners;
- Low sales price; or
- Real estate agent is contacted by a buyer/seller in a rush to buy/sell the property.
Some tips to help a title company avoid this type of fraud:
- Be extremely careful with emails from out-of-country sellers rushing to close the transaction;
- If you receive a rush sale request from the purported seller or a real estate agent, DO NOT rush; rather take your time and give the file your full attention;
- Ask the real estate agent how or from whom they received the sale listing;
- Contact the prospect seller via Zoom, Skype or another video-enabled meeting platform;
- Ask the seller questions about the property such as when and how they came to acquire it, and what their plans were for the vacant parcel to see if the seller knows the property’s history;
- Request to see the identification that will be used at the closing transaction;
- Check the seller’s foreign identification. Look at the picture (sometimes you can see that a picture was placed on top of another picture), and check for inconsistencies with the font and signs of tampering. Whenever possible, compare to a standard version of the identification, whether using a guidebook, an online resource, or even Googling samples of identification for comparison;
- Check the property appraiser’s website for the current owner’s address, and consider forwarding a letter to that address;
- Check the tax collector’s website, and review the history of tax payments to see if you can determine who the payor has been, and their mailing address;
- Research the notary and contact the Embassy or Consulate to confirm the notary works there. We have learned that many of the foreign officers are aware of this type of fraud; and
- If your gut tells you something is wrong, please follow your gut. That feeling is usually right!
For our agents, remember that you can be rewarded for your efforts through Alliant National’s Crime Watch Program if you prevent a fraudulent transaction from closing. Program details and the nomination form are on our website at alliantnational.com/title-claims/crime-watch-program/.
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.
Tags: crime watch, escrow fraud, fraud