SELLER IMPOSTER FRAUD Nobody wants to get fooled the first time, but we sure do not want to get fooled AGAIN. By now, almost everyone knows a colleague who has been fooled by a fraudster at least once. Recently, we have been screaming from the mountaintop about seller imposter fraud. If you have not heard about it, there are fraudsters pretending to be sellers and selling property that they do not own — victimizing real estate professionals and property owners alike. Please refer to our S.I.M.P.L.E. — Seller Identity Must Precede Literally Everything — and prior alerts for more information. In this fraud, we have several elements and red flags: 1. Remote Seller: A remote seller is someone not personally known to the real estate agent and/or the settlement agent, and they will want the proceeds wired. 2. External Execution: Conveyance documents are: a. Prepared outside of your office and not known to the realtor or settlement agent; or b. Prepared in your office but executed and notarized outside of your office. 3. Unknown Notary: The notary is not personally known to the real estate agent and/or settlement agent. 4. Vacant or Non-Owner Occupied: Investment property, vacation property or other vacant property (including improved and unimproved) where a potential fraudulent sale would not draw the attention of the true property owner. 5. Entity Ownership: In many of these situations, the property is owned by a non-personal entity, such as a corporation, limited liability company or trust. In some cases, the entity was recently formed with the same name as a dissolved entity and purports to transfer the property of the dissolved entity. The title examination reveals no issues, as the fraudster is pretending to be the actual owner. We need to enlarge our thinking to include a broader definition of the parties. The remote seller can also be a borrower in a cash-out refinance transaction. Presumably, the bank has vetted the borrower with all sorts of requests, but one cannot rely upon that alone. Do not delegate the protection of your livelihood and your net worth to what “someone else should have done.” Standard procedure would dictate that your standard procedures be followed. THE OLD FRAUD The longer one continues to work in real estate, the longer one’s list of war stories of battle scars and near misses becomes. Most of these stories wind up with the storyteller being the hero of the story. Here is one of mine, however, the hero was not me — the hero was “standard procedure.” 11 WEST VIRGINIA BANKER
RkJQdWJsaXNoZXIy MTg3NDExNQ==