Wire fraud is a very big problem in our industry and we all know that knowledge is power! Don’t be a victim – always be cautious when it comes to wiring money! We wanted to share a story that happened in one of our operations where an Escrow Officer caught and stopped a potential scheme.
Scenario: Title was processing a sale transaction. The title report was completed and the Escrow Officer was working on clearing title. The payoff demand was ordered and received. A homeowners’ association statement had been requested and the property taxes were confirmed. Everything was progressing smoothly.
The Escrow Officer received an email from the listing agent asking for a copy of the payoff demand. The email stated the seller was questioning the amount due. The Escrow Officer emailed a copy of the payoff to the listing agent.
Later that same day the listing agent responded and included an attachment with an updated payoff amount, and stated this was the correct payoff letter. The Escrow Officer thought it was strange since the amount did not change, so he began to look everything over very closely.
The payoff demand was received via eFax®. The seller’s mortgage was with ABC Bank. The Escrow Officer compared the email address he had on file for the real estate agent to the email he just received and it was a match. He compared the two payoff demands side by side and noticed they did not match.
The Escrow Officer called the listing agent to confirm his suspicions were correct.
The real estate agent neither sent over an updated payoff nor did he request a copy of the original payoff demand. The Escrow Officer urged the listing agent to change his email password and have his system scanned, since it appeared his email account had been compromised.
The file successfully closed, the Title Company paid over $95,000 to ABC Bank and the satisfaction of mortgage was recorded. Not only did the Escrow Officer save his company from a monetary loss, he also avoided a public relations nightmare.
Had the Escrow Officer simply sent the payoff funds per the altered demand, the seller would have most likely ended up with derogatory marks on his credit history for failure to make his mortgage payments. The buyer would have had a cloud on his title and the new lender would not be in first lien position. All resulting in unhappy customers and a mess to be cleaned up. As the largest title company in the nation and a Fortune 500 company, Chicago Title is committed to protecting you and we have the resources to do just that! If you would like to learn more about how to protect your money from wire fraud, please reach out and I can share some additional info and tips! The most important, CALL (DON’T EMAIL) BEFORE YOU WIRE!
By Diana Hoffman, Corporate Escrow Admin FNTG Title Group/National Escrow Administration