While fraudsters continue to target large cash transactions involving vacant land, the real estate industry is also seeing an uptick in fraudulent cash-out refinance transactions. (A type of refinance that provides borrowers with a lump sum in exchange for a larger mortgage so borrowers can use the extra funds to cover unexpected expenses or consolidate debt.) We encourage our agents and other real estate professionals to be watchful.

Letters to Known Taxpayers Are No Longer Effective

The practice of mailing letters to known taxpayers is no longer effective:

• Taxpayer’s mailing address is often erroneous or outdated.

• Because the known taxpayer’s mailing address is for taxing purposes only, it remains subject to edit for the purposes of paying taxes—including property tax payments from lenders on behalf of the owner of record. It is also very easy to change.

• Fraudsters can easily modify the taxpayer’s mailing address for tax bills and tax assessment notices.

Be aware that letters to the known taxpayer often go unanswered and may be intercepted by criminals, who can easily modify the mailing address for tax bills and tax assessment notices stored at the county level through impersonation and other deceptive tactics.

Recommended Procedures for Prevention and Detection

We recommend all real estate professionals follow these procedures:

• Monitor for Red Flags If you see something, say something! A recent instance of vacant land fraud involving a substantial cash transaction was only detected because watchful employees (who had been carefully trained to monitor all communications) identified red flags that indicated fraud. These fraud indicators include, but are not limited to, the items listed on our Cyber Crime and Wire Fraud Support Resource page.  

• Know Who You're Dealing With, Trust Your Instincts Make every effort to connect with the true owner, who may or may not be selling the subject property, and never ignore your instincts.  

• Stay Up to Date, Help Educate Your Clients Check out these educational materials from the American Land Title Association (ALTA) for the real estate industry and the public: Wire Fraud Advisory: Vacant Property Fraud and Seller Impersonation Fraud.

• Use Secure Technology Advocus uses CertifID to help verify secure wire transmittal of seller’s proceeds on transactions we close. Through extensive and ongoing training, strong partnerships, and secure technology, Advocus is leading the way into the future to stay ahead of cyber criminals and fraudsters.  

• Create a Rapid Response Plan In the event of fraud, time is of the essence. Create a response plan customized to your office. 

We welcome your questions on any of these topics and value your feedback. Please feel free to contact us with questions or comments.

As always, we appreciate your business and ongoing support.