Bulletin: NY000571

Date:
October 13, 2015
To:
All New York State Agents
RE:
Stolen Payoff Checks/Overnight Courier Packages

It has come to our attention that mortgage payoff checks are apparently being stolen from overnight mail courier envelopes.

Thus far the facts appear to be straight forward and are as follows:

Title closer places the mortgage payoff check and related documentation into the overnight mail courier envelope addressed to the payoff institution; in more than a few instances the overnight envelope has been opened, the payoff check removed, and the remaining contents forwarded to the payoff institution.  Therefore the overnight mail courier and the payoff institution will see that the envelope has delivered and received but the most important item-the actual payoff check-is missing. The named payee on the stolen payoff check is then altered by the perpetrator and deposited into a bank, presumably to be withdrawn as soon as funds clear, etc.

The question then becomes the following: how can one best protect themselves from falling victim to this type of foul play?

1)    If the option presents itself please use wires on mortgage payoffs

2)    When possible, refrain from using the “clear plastic pouch” on the overnight envelope-try to affix the shipping bill directly to the overnight envelope. It is more difficult to compromise the overnight envelope in this matter; the “clear plastic pouch” allows the shipping label to be easily removed and inserted into a new envelope; any actions that can be taken to potentially thwart an individual from compromising the overnight envelope, such as stapling or taping the overnight envelope closed, should be taken.

3)    If possible, please try to refrain from using the words “Attention: Payoff Department” or other similar words that would lead an individual to believe that the envelope would contain checks. Title closers should obtain the name of the person they are verifying the payoff figures with and then send the overnight envelope directly to that person’s attention.

4)    VERY IMPORTANT-verify with the payoff institution that the PAYOFF CHECK has been received, not just that the overnight envelope has been delivered.

In the event that it appears that you may have fallen victim to the above scenario, contact Stewart Legal Services immediately, together with the bank attorney or entity that issued the payoff check(s) as well as the attorneys for the respective parties; immediate notice is key in the effort to minimize any damage that can occur.

THIS BULLETIN IS FURNISHED TO INFORM YOU OF CURRENT DEVELOPMENTS. AS A REMINDER, YOU ARE CHARGED WITH KNOWLEDGE OF THE CONTENT ON VIRTUAL UNDERWRITER  AS IT EXISTS FROM TIME TO TIME AS IT APPLIES TO YOU, AS WELL AS ANY OTHER INSTRUCTIONS. OUR UNDERWRITING AGREEMENTS DO NOT AUTHORIZE OUR ISSUING AGENTS TO ENGAGE IN SETTLEMENTS OR CLOSINGS ON BEHALF OF STEWART TITLE GUARANTY COMPANY. THIS BULLETIN IS NOT INTENDED TO DIRECT YOUR ESCROW OR SETTLEMENT PRACTICES OR TO CHANGE PROVISIONS OF APPLICABLE UNDERWRITING AGREEMENTS. CONFIDENTIAL, PROPRIETARY, OR NONPUBLIC PERSONAL INFORMATION SHOULD NEVER BE SHARED OR DISSEMINATED EXCEPT AS ALLOWED BY LAW. IF APPLICABLE STATE LAW OR REGULATION IMPOSES ADDITIONAL REQUIREMENTS, YOU SHOULD CONTINUE TO COMPLY WITH THOSE REQUIREMENTS.

References

Bulletins Replaced:
None
Related Bulletins:
None
Underwriting Manual:
None
Exceptions Manual:
None
Forms:
None