News for Public Officials and the People They Serve

Cut, Paste, Release!
by Robert Franco  | 2008/06/30 reprinted with permission

I don't think anyone should be too surprised, but there is a new scam hitting Ohio counties, and probably other states as well, that is causing major headaches for lenders and title companies.  Forged mortgage releases are getting filed! What can you do to protect yourself?

An email dated June 25, 2008 was sent to all of the county recorders in Ohio alerting them of the scam.

Someone has been scanning MERS satisfactions and then taking the MERS officers signatures and cutting and pasting them to satisfactions for mortgages that are not paid.

With the availability of electronic images online, this is probably much easier to do than it once was.  An article previously published on News For Public Officials, by Janice Forster, hypothesized that this may have been the tactic used in a "massive identity fraud scheme."

Everything from death certificates to mortgages, marriage records, deeds, wills, and more are available online in North Carolina and most other states, and all for the taking. Full document images that can be altered with cut and paste options on any computer.

You don't have to be a computer geek to alter electronic images anymore.  Many computers come with everything you need right out of the box.  With a little practice and good quality printer it can be difficult to tell the original from a fake. 

Mortgage Electronic Registration System (MERS) has a Web site where you can verify release.  Mortgages that are paid off, or otherwise terminated, will show as "inactive."  A thorough title search may require more than just a search of the "Public Records" to be sure that the information obtained from the courthouse is legitimate.  Though this particular scam was discovered as it pertains to MERS mortgages, it could just as easily be affecting other mortgagees as well.  There really is no way to be certain. 

Abstractors and title agents will need to be even more diligent.  Perhaps more needs to be done to verify with the mortgagee that releases are genuine.  Title insurance will protect homeowners and mortgagees from fraud, but the title industry is already suffering larger losses from fraud and we all need to do our part to minimize the effects of these types of scams.

It is a sad day when you can no longer trust the documents recorded at the courthouse.

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About the Author

Robert A. Franco has been in the title industry for nearly 15 years in the state of Ohio. The owner of VersaTitle, a full service abstracting and title company, and the founder and president of Source of Title, a Web site devoted to providing media and marketing services to the title industry, Franco has dedicated much of his professional career to furthering the role and significance of title examiners in the title insurance industry.




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