The fact that lenders are allowed to put this bogus liens on the properties on this bogus loans is ridiculous and should be close to criminal negligence.
It might be a good idea to have the home purchaser agree to give true contact information and be willing to verify it via a different form. Use an agreed upon secure transaction method or code (Example) you leave a phone number with the lender that must be called before any financial activity can be moved forward, with a letter to the property address if someone offers a different email address or phone number to use for contact, or a phone number along with a letter that requires a response that has a code in the letter. It would be a means of keeping a "finger on the pulse" of the life of the property. Would it be a perfect solution ... when has mankind ever had a perfect solution, but you do what you can, and change it as you see more secure means.
It smells strongly like an inside job - the lender didn't care whether the work was done, or who the "loan" actually went to, because they always had a backstop plan to put a lien on the properties.
@@patriot9455all that information is already available from data brokers. They have your email accounts, phone numbers, age, weight, income, disposable income, religious affiliation, political affiliation, and nearly any other information a business might want about you. What's actually needed is a security certificate issued with any state/federal ID that is required for signatures in electronic documents. People will still find ways to steal the credentials, but it's a lot easier to get notification and be able to track when the certificate has been used.
Be glad they are that cautious. I had a checking act. opened in my name 5 states away. I only found out when I got a Welcome e-Mail. And 3 other attempts that I caught. I have now frozen my credit so it takes my approval to see it.
RIGHT? $100K home loan, no problem. Here ya go. Enjoy the money. Trying to buy gas on the Interstate? Oh heavens nonono. For a while I was doing a 1200 mile road trip about every 6mo. Every time when I stopped to get gas on the Interestate the second time, my CC was declined. Flip to second CC and I get one or two fills and then declined again. Pause to contact both cards and tell 'em to turn it back on and continue. I even tried calling 'em to say "I'm launching on another of those same trips tomorrow, could you pretty please not turn my card off 500 miles from home?" Answer "nope...fraud detection is a whole 'nuther universe and we aren't allowed to contact them, and you DEFINITELY are not allowed to talk to them."
Yep lenders need to be on the hook for all Fraud they are the one giving out the cash afterall. I bet the amount of fraud would drastically reduce if their own money was getting hit.
First off the contractor who applied for these loans is ultimately responsible since they created the scam in the first place BUT the lenders are also responsible for failing to verify the identity of the borrower and therefore they MUST also accept a share of the responsibility because of their failure and in this case it looks like they have been doing so though they may not accept responsibility for any damages people might have suffered because of the presence of those liens against their property. It's too early to say yet whether anyone who had one of these false loans held against their property did take a financial hit.
I have no sympathy for the lenders in any of these cases. They are supposed to do adequate due diligence when loaning money. Clearly, their definition of due diligence is lacking in at least some important respects.
@westernbody you obviously didn't listen to the video very carefully. Steve said that the lender has actually released quite a few leans recently because of the fraud and because they did have a problem with the having not done their due diligence. So they're not going to seize these people's properties.
This sounds like the lending company's problem. The homeowners didn't participate in the transaction or approve it, so it's up to the lending company and law enforcement to get the lender's money back and leave the homeowners alone.
One caveat to that, some digital signatures are more secure, like ones tied to a physical object (Smart Card) that are secured by a pin. US military uses those all the time. But just a tickbox that says "I am who I say I am" is obviously wrong.
I agree. Sure it's a hassle to print off and go to a notary and then fax, or mail in original paperwork. But the protection it provides is more than worth spending an hour of time to prevent fraudulent activity
It almost seems like these lenders are playing a part in this fraud as well. I'm a licensed GC and here in Florida you can't just get a lein. You need to prove a contract and file a Notice To Owner, and file a Notice of Commencement at the county courthouse where the property is located. This sounds really fishy.
@@patriot9455 You are right. Many years ago I got a notice from a computer company about a new computer I had just purchased and paid for using a CC. They contacted me to verify that I had moved as it was a new shipping address in a different state than my previous purchases from them. I called them, explained that I did not order that computer, and asked how they were paid (as the Computer company did not have my CC on file). They told me which credit card of mine was used. I asked what was the shipping address. It was an office in an office building right across from the CC companies operation center. I called the fraud department at the CC and told them the story - and that it had to be an inside job (and whomever did not know that I had purchased computers from that company before using a different CC so the computer company knew my past shipping address). That I believed someone on their staff was buying stuff using stolen CCs, and collecting the packages across the street when they got off of work. The CC Company talked to the computer company and arranged for the computer to be shipped nominally against my CC. Then their agents with the local police were waiting for whomever showed up to collect the packages the day the computer was delivered. They got him - someone that was previously respectable in the CC company, and there were 6 other packages that day from various electronics companies, and they were able to track several hundred purchases from their CC customers to that rented office delivery address in the last several months. Of course the CC company removed that charge from my CC immediately (it never appeared on my statement), and thanked me for notifying them. The CC industry a few years after that started ensuring that ship to addresses matched registered card holder addresses (although I have called them and given them alternate "one time" shipping addresses from time to time for gifts).
It's a little faster and looser in Louisiana. You can file a lien without a judgment at the county (parish, actually) courthouse. Perhaps that will change now.
Yep, you know there's an old saying in Tennessee.. I think it's in Tennessee, we have it in Texas... "Fool me once, shame on... shame on me.. Fool me 25 times, that's an inside job."
I refinanced about 4 years ago, and I stated clearly that I would absolutely not do any digital signatures, and that I would only sign papers in person in the bank. The bank is a mile from my house, and there is zero reason to sign documents through email. Everything went smooth as silk. In this case, the fact that a California lender is financing remodel construction in Louisiana should have raised a ton of red flags. I've never heard of a lender providing funds for construction, without having a rep check the work before issuing a draw check. All of the standard practices seem to have just disappeared, so I'm not sure why these lenders are surprised that they get scammed, they seem to be begging to get scammed.
As a Louisiana resident, I can’t transfer a car title without having the seller sign in front of a notary, but someone can just take out a loan on my house without proof of ownership?
How does this lender not figure out after a short time that none of the loans being originated for a given contractor are having their monthly payments paid?
The loans are in the property owner's name; the contractor is out of the picture and has no responsibility for a homeowner's non-payment issue because the law allows it to happen. It's sometimes referred to as a mechanic's lien.
THIS is why Title Lock exists. Also where I live, you can register with your county to have them notify you if ANYTHING is going on with the Title/Deed to your property. When I purchased my home, there was no lien or mortgage because I paid cash for it. And it was a wire from my bank to the receivers bank. I had to provide my ID and Prove who I am. It is insane to me that this kind of scam can occur. And the lack of due diligence on the part of the lenders almost makes it appear to be an inside job. I hope the feds catch the perps and put them away for 70 years.
I am a notary. There is a new process in place called “remote online notarization” where everything is done online. I refuse to get credentialed for this because of the very problem you are addressing. Thanks for what you do!!
That's not what happened. Almost certainly a low-mid level employee of the lender figured out there is a step in the chain that doesn't have safeguards against what happens if a crooked employee colludes with a third-party willing to pretend to be a contractor. The security is almost all focused on proving the homeowner is who they say they are but what if the bank employee just falsifies everything? It doesn't matter if it's a physically notarized piece of paper or an online one because the entire piece of paper is fake. You notice they reversed the liens, right? That's likely because the notarizations were all obviously fake when the FBI got involved. Online or offline the same would happen.
Online Notarization is about as sensible as having the TAN generator app on the device you do online banking with. At this point, you may as well stop the effort!
Not exactly the same thing... but if you ever get a call (allegedly) from your bank or your credit card company and they say your debit or credit card has been compromised.... Always ALWAYS say you'll have to call them back, hang up, and dial the number on the back of your card. That's the only way of knowing that you really are talking to the financial institution, and they will tell you if your card has been compromised. Scammers can easily spoof caller ID so the incoming call looks like it's legit. I've had more than one friend almost fall for this one.
If you get a call like that, it’s 100% a scam. The bank doesn’t call you, they turn your card off so you’ll call them to find out why. This happened to me. Somehow my card was used in 2 different places about 800 miles apart within 30 minutes of each other. The bank actually caught it. All I knew before I called was my card was being declined and it wasn’t because of insufficient funds.
Of course I have received such calls. You would not believe all the twists of the stories... Of course it all ends when I ask which child of mine are their parents, because to the best of my knowledge I have no children (although I admit there is one possibility that I never heard from again after we separated).
This is not an evolved scam, it's as old as dirt and goes like this: _give me money, he'll pay you back._ Only a fool would not contact the _he_ first.
Sounds like internal fraud because the most reasonable sane outcome would have been to perform due diligence when rendering a lien. They should be criminally culpable and held to the fullest effect of the law.
Closing Docs in Oregon have to be signed in front of a notary. Even if signing digitally a mobile notary will come to you in person , ID you, open the Docs on their computer/tablet and watch you sign/DocuSign them.
They make $billions on loans so $45,000 is pocket change to them. Besides, the criminal isn't held liable for non-payment because the law allows the lender to go after the property owner (for legitimate liens). So, there's no incentive initially.
They can afford to send hundreds of thousands of dollars for a loan, but they cant afford to send out one person to verify that the work was authorized or being done.
There has to be an inside angle to this scam. You have to jump through hoops in Illinois even when you the homeowner are getting the money to disburse. And that is fine with me.
These identity thiefs don't have to prove they are who they say they are, but you have to prove you've been scammed.?. I complained about stolen identity because my name was used on multiple documents that I had nothing to do with, including properties, vehicles and a marriage certificate all from cities or States I've never lived in.?. WTH. So far I'm being denied any information or documentation and I'm left with having to prove it happened. Despite pointing out that it's all public records that have incomplete information. The FBI is involved in this, they are helping to keep it hidden from people.
Fun fact: if you want a second mortgage the bank does this thing called KYC where they are supposed to run a background check so they dont inadvertently fund criminals organisations. No idea why they did not do this. Maybe regulators should make them do their jobs.
I will admit that my quick glance at your comment made think, what does Kentucky Fried Chicken have to do with this problem? Fortunately, upon further careful reading, I now realize it's Know Your Customer.
This reminds me of the stories about scammers in the 2008 housing bubble. They were taking out massive home loans in other people's names without their knowledge. All they needed was some basic information about the victim, and someone of the same gender as the victim to pretend to be them on a phone call with the bank.
20+ loans all with fake social security numbers and other fake information sounds like a lot to slip by, unless this is out of many thousands of loans. One or two sure, but 20+? Is it possible the lenders were in on it with a kickback and they're taking advantage of some tax law?
This has been going on in commercial construction for years. There are entire offices at large general contractors dedicated to verifying invoices submitted match work that was actually completed.
I’d love to find these lenders who will lead out money with so few questions. Any sort of property transactions that I’ve been involved in have been a huge pain in the a$$ because of all of the documentation requirements
It is ridiculously easy for anyone to change the title of your house or use it as collateral for a loan. The county needs to change and enact strict enforcement (state I.D.) so that only the homeowner can change the title or use it as collateral.
Good Video. Here in Volusia County Florida, our County Clerk's office allows homeowners to sign up for a free service to notify them any time anything happens to the title of their home like a quit claim deed, etc. I don't know if would cover leans being placed on the title, but it may. How can one protect themselves from this type of problem? The "Paid Protection" big name companies evidently only alert you AFTER the problem has happened, so basically it's too late to head it off at that point.
This had to stop. All loans and sales should be required to take place at a government office similar to the department of motor. That way, they can verify that the owner is the person taking out loan or selling property.
The state also needs to exempt the Parcel Id -> email address (or cell phone for text) from FOIA. Otherwise it's one more source of personal data for the scammers to use.
My state (AZ) and probably other states have a program that you can sign up to have the county assessor notify the property owner of any paperwork filed against their property. When I paid my house off, I got a notification via email that the lender removed their lien on my property. It won't stop fraudulent liens against your property but you'll get early notification so that you can possible take corrective action. Lenders will treat no action = approval of the loan by the property owner.
UCC-1's are common in the machine tool business anytime a machine is financed or of the distributor feels they want to maintain control over the machine until it is paid for. In the 80's and early 90's UCC-1's had to be signed by the debtor/purchaser prior to filing. I used to get a lot of resistance back in the day. UCC-1's to my knowledge as Steve said were not designed to secure loans on deeded property.
My county has a free system that's supposed to send me an email whenever there's a document recorded against my property number. I put in a title change myself to retitle the house from me as an individual to me as trustee, and I never got the notification email, which was disappointing. But in theory, it sounds like a really good feature.
In some states (MS) it may take up to 90 days for anything to be recorded against a property. I was notified in 3 weeks when my lender removed themselves from the lien on the property.
The problem is that when fraud is found there is literally little to no punishment for this type of crime. There is also very little active investigation into this type of crime until it gets big enough for the national media to report on it.
This is astounding. The lenders demand more information and verification than St. Peter at the Gate. You really have to wonder about this lending outfit.
This should be Life in Prison without the possibility of Parole. We need to take this type of crime WAY more seriously than we do. We have been treating crimes like this as no big deal for way too long.
At least the lender is cancelling the lien. HOpefully, it didn't cost the homeowners more than the time it takes to tell the bank the loan was fraudulent.
Here in Arizona, you can sign up for notifications on your name and address. Whenever someone puts in paperwork with the court using your name, you get an email. Another reason it's real fun having a somewhat generic name.
In my county, there is an online publicly available county run property search, where you can view lots of information about properties in the county. I used to think that was kind of fun to explore. One day it struck me though, that people can see all that information about my property and I as an individual that owns property. Then I felt like the publicly available information through the county's property search website, was suddenly creepy and invasive.
I think people need to get back to doing business in person, and on paper. It won't completely stop this stuff, but the Internet is just predators preying on each other. Doing anything concerning sensitive data is an unnecessary risk.
Exactly. No reason you can't do all the paperwork digitally then go in person to a local rep for the company to have a final verification and complete the deal.
Im betting the lender is in on it, because if they had this persons mailing address why didnt the original paperwork come them to begin with😐🤔?? Sounds like a way to get debt off your books, then get the kickback behind closed doors😔🤔.
I bought a house in February 2020, less than two weeks before the shut down. Money was wired, but we met in person for the closing. I sold a house in August 2021 and the entire process was online.
Lender must be held accountable for lack of proper due diligence, as well as an investigation done to see if a single agent or group of agents was responsible for all of these approvals and to determine possible criminal and civil liability. And, the contractor needs to have their business license revoked, and they need to be investigated to see who all with the company is behind this, so they can pay damages, fines, or do jail time, accordingly.
Here in SC, even an internet refi must be handled by a notary/lawyer/both to finalize the transaction. I haven't done a second, but I presume it is the same.
The really sad part is that anybody can put a lien on your house without your knowledge! Then at a later time, your house can be sold - without your knowledge - to pay off the lien!
My favorite scam email was offering me 4 free bottles of turmeric. Whether it was as a curry spice or a health supplement was unclear, but it was just so random it was funny.
Steve, Three years ago, I bought the home that I am living in. The whole purchase transaction took place over the internet.! I was buying a place in another state, that I had never been to, and I had only seen pictures of the house! This particular deal was the FIRST all internet transaction for my bank, and there were a number of extra people at the closing to watch it unfold.🙂 It was MUCH quicker than 6 years ago, when it took a few DAYS to complete the deal. Electronic transactions leave more chance for shady deals.😉
In Florida, you can go on-line or in person to your county Tax Assessor/Clerk of Courts web page or office and sign up to be notified of any claims, liens, or other legal documents recorded/posted against your property. You can also be notified of legal property documents with your name listed on it, such as first name, middle name, or last name. It works because I signed up to be notified of anything legal documents being recorded with my first and last name listed. When I'm notified it is always someone with a different middle name or initial, or different address. All this type info is public information and available to anyone.
The bank sent the paperwork out, thinking the home owner would be stupid to pay without investigating. Someone at the bank is being paid under the table to make this happen.
Ridiculous that the lenders are not already required to complete much more due diligence to minimize this sort of risk since they are the ones making money from the contracts. Seems to me theses loans should require insurance provided from a third party company who verifies the information to the degree that they are willing to take on any liability if there ends up being fraud, and if the terms to qualify for the insurance cannot be met then the loan contract cannot be completed.
To me it's common sense that the property owner is notified that there is a lien now on the property. Maybe the notification is sent registered "snail mail" to the physical property.
