Commercial Real Estate Blog by Madison
Tag Archives: mortgage fraud

Inadvertent Mortgage Fraud: A Day Late Means Many Dollars Short

By: Eliezer Shaffren, Esq., Senior Commercial Counsel, Madison Title Agency

There are situations that arise in real estate transactions that can result in inadvertent mortgage fraud. That’s right. Unintentional and without malice, but mortgage fraud just the same. Case in point.

Mr. Jones arrived at the sale of his property fully prepared. At the closing, all title exceptions had been cleared, and payoff letters have been obtained for the remaining open mortgages. The first mortgage, a purchase money mortgage, had a payoff of $500,000, which would be paid off at closing. The second mortgage, a home equity line of credit (HELOC), had a maximum allowable draw of $50,000. Mr. Jones had only drawn $10,000 of the HELOC. He obtained a payoff letter, confirming this amount was also to be paid at closing.

The closing proceeded smoothly and Mr. Jones left the room, confident that all of his bills had been paid and debts satisfied. Newly flush with cash from the sale, Mr. Jones invited a group of friends to his favorite restaurant to celebrate. That’s where things went wrong. Continue reading

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The Pervasiveness of Mortgage Fraud – Forged Documents

By Debra Smith, Associate General Counsel, Madison Title Agency

Mortgage fraud is pervasive. This is the first of a series of blogs describing different types of mortgage fraud and the flags that can help anyone involved in the real estate and financial sector identify them.

One fraud seen with increasing frequency is forged mortgage satisfactions. A major example of this type of fraud occurred in 2005 in Greenwich, Connecticut. A respected real estate developer owned a number of commercial properties. It turns out that to generate more cash flow, he was routinely forging mortgage satisfactions of mortgages encumbering properties he owned. Continue reading

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Happy Anniversary to the Trusted Advisor Blog

By: Elliot Zaks, Principal, MCRES

We are pleased to celebrate the anniversary of the Trusted Advisor blog. It’s been four years since our first post entitled “Two Recent Court Rulings Impact Related- Party 1031 Exchanges.” Since September 2010, the Trusted Advisor has consistently published informative and helpful articles. Topics have touched on such diverse topics as crowd sourcing, mortgage fraud, real estate easements and development rights. We’ve blogged regularly, averaging 32 posts per year. In that time, we’ve had 104,917 page views and 38,002 readers.

Read on to find out our top ten posts! Continue reading

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Mortgage Fraud: Beware of Illegal Schemes

By: Elliot Zaks, Principal, Madison Commercial Real Estate Services

Mortgage fraud is a growing threat to the real estate industry. Although most people involved are honest, there are some borrowers, loan officers, title agents and attorneys engaging in criminal activity in order to make a quick buck. The real estate market is still suffering from the aftermath of the industry meltdown. Suspicious activity reports for mortgage-related fraud is climbing steadily each year, reaching 93,508 in 2011, versus the 46,717 reported in 2007.* While reporting suspicious activity is up, new technology has also made fraud easier than ever. Computer systems leave a window open for enterprising and technology-savvy criminals. All it takes is an Internet connection and a copy machine to produce a false Satisfaction of Mortgage document.

In a recent seminar hosted by the Madison Learning Center, the Vice President and Claims Director at one of the nation’s major title insurance underwriters discussed the various ramifications of mortgage fraud. Here are some of the most common scams now and some of the warning signs to spot potential fraud. Continue reading

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