It has often been reported since 9/11 brought terrorism to our shores that we are made safer in the U.S. by the unseen and unheralded anti-terrorism work that is done behind the scenes. We don’t often know what was averted because of this dedicated team and rarely appreciate the skill and vigilance it takes to keep us safe.
This is equally true in the world of title insurance, escrow and closings, where title professionals who are working every day on the front lines of real estate transactions “see something and say something” to ensure home buyers and sellers funds, property and rights are protected against fraudulent intervention.
Here are just a few of the hundreds of scenarios title agents encounter everyday as they work diligently to successfully and safely close real estate transactions.
Forgery
One area of expertise in which an escrow agent is highly trained is the ability to help prevent forgeries, which have grown increasingly widespread in the notary space especially. This covers an entire range of nefarious actions.
Bad actors sometimes forge a deed, record it at the courthouse and then on the basis of the new deed, attempt to sell the house out from under the real owner. This happens most often on properties that are unoccupied or vacant land, where it is much easier to lure a buyer into a bogus purchase.
Agents have also encountered adult children attempting to sell their parents’ homes through forged documents such as Power of Attorney, or simply by attempting to stand in as the parent and true owner, attempting to forge the owner’s signature.
Escrow agents are trained to study and compare signatures in a transaction to ferret out such forgeries. They’re further trained to identify high risk scenarios, follow internal controls and even often obtain the power of attorney themselves. They do this by looking deeper into transactions that are high risk for fraud, digging back into the records to verify that the chain of title makes sense in the natural order of things, and often uncovering inconsistencies that require further investigation and resolution.
Funds Diversion
When real estate funding moved away from cash and check to wire transfers, the anticipation was that funds would be safer. But fraudsters quickly jumped into the game attempting to divert wire transfers through Business Email Compromise (BEC) and Account Takeover (ATO) scams.
Escrow and closing agents have become highly educated on the tactics fraudsters use and have devised multiple defense systems and strategies to ensure fraudsters don’t get a foothold into the transaction.
This includes behavioral training, where they carefully instruct all parties how and when confidential information is to be shared and routinely use encrypted emails, strong password systems, and multi-factor authentication to baffle fraudsters efforts to intervene.
They also set up procedures outside of email for clients to follow when verifying any changes to the transaction to ensure no one in the transaction is inadvertently lured into a phishing scam.
One final means of protection involves insuring funds both in and out of escrow.
Most clients understand that a title agent’s role is to investigate ownership rights, compile the paperwork and funds for the transaction, and conduct the closing. But often the most vital role an agent plays in the transaction is all of the effort behind the scenes to ensure the legitimacy of the transaction and the safety of the funds.
At PDS, we’re highly skilled in fraud prevention and have access to the latest tools and technology to assist us with this valuable service. Contact us today to learn how we can help you successfully navigate the complicated title issues that can emerge in the course of a real estate transaction.