MEET THE NEW FRAUD, SAME AS THE OLD FRAUD Recently, we have seen a new twist to the seller imposter fraud — refinance owner imposter fraud, which is essentially just like what I encountered 20 years ago. However, it is easier to do because they can send in copies of IDs via fax or email, and most people would take them. After all, the bank only required that the settlement agent “get copies” of the proof of identification. Imagine someone saying, “The bank did not require that I look at them.” In fact, the bank requires that the actual borrowers sign the documents. For that matter, so does the law and common sense. This refinance fraud happened last month. A bank referred a settlement agent to a refinance closing, which involved a cash back to the borrower of over a half million dollars. This was a mail-away — a nonsensical term for a transaction involving someone’s home, someone’s career and over $500,000. We are not talking about sending away box tops to get an Twenty years ago, a friend and colleague at a local bank had referred a client to me for a refinance. I had never met the couple before, which is not unusual. However, I had a comfort level with them because they were the customer of a good friend and referral source. He would never send me someone that was not on the up and up, right? Well, certainly not intentionally. Everything went according to standard procedure — title was good, payoffs were as expected, appraisal was strong, and the couple had worked with my friend on the purchase. They came into my office and sat at the conference table and signed the documents, laughed at my jokes and were looking for a six-figure cash out to fund “some renovations.” As we concluded the signing, following standard procedure — the hero of our story remained in control — I asked them for their respective driver’s licenses. The husband quickly complied. The “wife” began to pat herself down nervously as if there was an insect crawling up her sleeve. She indicated that she had left the ID in the car. I told her that I would wait for her to retrieve it. She came back after about five minutes, returned to her seat at the conference table across from the “husband” and apologized for leaving her ID on her dresser at home. In our conversations, I had noted that she worked at an office less than half a mile from my office. I suggested to her that she could bring it tomorrow. After all, we still had a three‑day rescission period before we could proceed. The mood changed as she started to get agitated with me and, in a rather aggressive and disgusted tone, demanded to know, “Do you mean to say that if I do not give you my driver’s license, this deal is not going to happen?!” To which my response was, “No ma’am, I did not mean to say that. That is exactly what I am saying.” I guess she expected me and my faithful companion, “standard procedure,” to stand down because she screamed at her “husband” across the table, “YOU SAID I WOULDN’T GET IN TROUBLE!” (In her defense, it sounded like someone screaming at their husband.) Her outburst and incriminating statements immediately stopped the closing. I informed them that I had just saved them from committing bank fraud. They did not seem very appreciative of me stopping them from going to jail. (The “husband” did not think he had done anything wrong because he signed his own name.) I informed them that if the actual wife was available, I could reprint the loan package; she could come into the office and sign; and we could proceed. It turns out that the co-conspirator “wife” was actually his sister. (Gladly) I never heard from either of them again. I told my banker friend that the wife was unavailable to sign. Standard procedure saved the day and kept this (probably soon-to-be divorced) “husband” from depleting all of the equity out of the marital home without the wife’s knowledge and going to jail in the process. These people were sitting in my office. Imagine how much easier it would be if it were a mail-away and all that I had were copies of the IDs and no opportunity to compare them to the actual individual face or signature. 12 WEST VIRGINIA BANKER
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