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Mortgage Payoff Fraud

Important Message to Our Customers, from Gilbert M. Hoffman, Chief Title Counsel:

Beginning in early April, title companies began receiving alerts from various governmental entities about a large increase in mortgage payoff fraud. We are now informed by both the FBI and the Secret Service that mortgage payoff fraud continues its sharp rise, resulting in large losses.

Consequently, extra diligence with mortgage payoffs is required. Beware of fictitious or altered payoff statements, from someone impersonating the mortgage Lender, mortgage Broker, or a seller’s or borrower’s representative. The impersonators will claim that the original payoff letter is erroneous because of additional payments received, an adjustment in interest, changes in escrow for taxes or insurance, etc., and will then send a revised payoff letter by Email, Fax, eFax or Courier, with false bank information, wire instructions, and payoff amounts.

Some suggested protective measures to avoid diversion of payoff funds include: 

  • Obtain payoff statements as early in the transaction as possible, to allow sufficient time to carefully review and verify prior to disbursement.
  • Verbally verify banking information and payoff amount directly with the payee, using known, trusted numbers rather than information from the payoff.
  • If prior payoffs have been made to the same payee, compare prior and current payoff information to confirm that current banking information matches what was previously used.
  • When verbal verification from a known, trusted number can not be obtained, consider other payment options, such as overnighting a check to the payee.

My thanks to Scott Spinner, Esq. of Fidelity National Financial, for his valuable input.

Gil Hoffman

Vanguard Research & Title Services, Inc.
Vanguard Research & Title Services, Inc. is a full-service research and title insurance provider offering comprehensive real property research, title insurance products, and services throughout the State of New York. If there is a service you require that we do not currently provide, please contact us about building a custom solution for you.
CORPORATE OFFICES:
407 South Warren Street, Syracuse, New York 13202
315-422-6031 | 800-294-3740
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TLA# 1361055 - Licensed Title Insurance Agent with the New York State Department of Financial Services.
Vanguard Research & Title Services, Inc. is a full-service research and title insurance provider offering comprehensive real property research, title insurance products, and services throughout the State of New York.
CORPORATE OFFICES:
407 South Warren Street, Syracuse, New York 13202
315-422-6031 | 800-294-3740
OFFICE LOCATIONS
Onondaga County | Oswego County
POLICY ISSUING AGENT FOR
Fidelity National Title Insurance Company
Chicago Title Insurance Company
Old Republic National Title Insurance Company
Commonwealth Land Title Insurance Company
WFG National Title Insurance Company
© 2012- Vanguard Research & Title Services, Inc.
All rights reserved.

Privacy Policy | Rates & Fees | Blog | Newsletter | Contact Us
TLA# 1361055 - Licensed Title Insurance Agent with the New York State Department of Financial Services.

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