Take Judicial Notice: Fraudulent Mortgage Payoff Letters
Take Judicial Notice: Fraudulent Mortgage Payoff Letters
Over the past year, as a result of the pandemic, Title Closings have seen significant changes to the closing process which have presented challenges to the real estate industry as a whole.
One major challenge that we have been experiencing of late is an increase in the circulation of fraudulent mortgage payoff letters. Fraudsters have become very adept at hacking the emails of ANY individual(s) involved in a particular real estate transaction. They have mimicked payoff letters that appear to be identical to the original payoff letter ordered by a seller or their attorney. These fraudulent payoff letters may contain different wiring instructions or a different payee with a different mailing address for an entity purporting to be a servicing agent for the payoff bank.
By hacking the email of one of the parties associated with the closing, these fraudsters will send altered payoff letters to different parties involved in the transaction. The recipients of these emails may be the broker, the lenders attorney, the purchaser’s attorney, the title company, or all of the above.
In order to combat this problem, all parties involved in the transaction must be extremely vigilant. All payoff letters should be independently verified by searching the internet to verify that the telephone number and street address on the payoff letter is accurate. If you cannot locate the phone number or address on the web, a call to the customer service department of the institution should be able to verify that the information is correct. No information received via email or fax should be relied upon as accurate, if you receive a fraudulent payoff letter the telephone number and address on it will not be accurate.
The current practice of verifying payoff figures at the time of closing is no longer an option by the title company. Judicial Title requires that all payoff letters be forwarded to our office at least 24 hours prior to closing so that the figures can be verified prior to arriving at the closing table. In addition, Judicial may request written consent from the seller to act on their behalf when confirming payoff figures in the event that they won’t release this information to a third party.
If you have any questions please contact our Legal Department at 1-800-281-8485 or email info@judicialtitle.com.
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