Bulletin: SLS2021007

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Bulletin: SLS2021007

Bulletin Document
V 1
Date: October 20, 2021
To: All Issuing Offices
RE: CLAIMS AVOIDANCE - Fraudulent Land Sale Scheme

Dear Associates:

We want to make you aware of a real estate scam that has resurfaced over the last several months. The scenario involves attempted sales of vacant properties owned by non-US citizens, located outside of the United States. Although the scheme is especially prevalent in Southwest Florida, it has broader geographic implications, and may occur anywhere.

In this scheme, the fraudster impersonates the real owner and retains the services of a local real estate sales agent to handle a sale of a vacant lot. There is no personal relationship or contact involved and all communication between the purported seller and the sales associate/broker and title agent is by phone, text, or e-mail. The transactions usually do not include high dollar value lots and do not include financing.

Below please find a listing of red flags we have found to be common in these cases. In the usual case, the seller will claim to be located overseas, but at a different address from that maintained by the county property appraiser/tax office. In a number of cases, closing documents have been returned by overnight couriers from yet another location.

One of the primary ways we have found to be effective to combat this scheme is through the use of a confirmation/thank you letter sent by regular mail directly from the title agent to the seller at the address for the seller shown in the county’s records (property appraiser/tax office), and not to the subject property address or the seller’s address stated in the sales contract or text or e-mail. The letter should include a request that the recipient should contact the closing office immediately if they have not agreed to sell the property.

Our intent is to increase your awareness any time you are contacted to handle a closing involving these characteristics and urge you to contact the true owner to confirm their involvement in the sale. Of course, feel free to contact your local underwriter any time you have questions related to a transaction.

Red Flags:

  • No outstanding mortgages - free and clear property;
  • Vacant land;
  • Seller in a rush to close;
  • Owner is a non-US citizen;
  • Sales amount is usually under $50,000, although the amount may be higher;
  • County’s Property Appraiser records show the owner’s address to be outside of the United States;
  • Real estate agent never meets with principals and is hired by e-mail;
  • Sale documents are e-mailed to seller, no in-person closing or use of RON;
  • Typographical errors and non-matching signatures common;
  • Passport/ID appears suspect with use of cut and pasted photos;
  • Notary acknowledgments are suspect and may claim to be from US Embassy or an attorney/notary in South Africa or other foreign country;
  • Purported owner is not currently located at the owner’s address listed in the county’s tax records;
  • Wiring instructions utilize banks not located in the owner’s country of residence (as shown in county’s tax records) and/or list third party payee/account owner;
  • Multiple foreign countries involved for one party (e.g., seller in one place, documents notarized in another, wire going to another country);
  • Documents sent to title company already executed without prior inquiry to title company about how they need to be completed and acknowledged. 

If you have any questions relating to this or other bulletins, please contact a Stewart Title Guaranty Company underwriter.

For on-line viewing of this and other bulletins, please log onto www.vuwriter.com.

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:
Underwriting Manual:
  • None
Exceptions Manual:
  • None
Forms:
  • None