Foundation Title was recently alerted to reports by the U.S. Secret Service and the F.B.I. of a sharp rise in the number of mortgage payoff fraud incidents due to the large volume of purchase and refinance transactions going on in the country right now.  We want to take this opportunity to assure our buyers and borrowers, as well as our industry partner real estate agents and attorneys, that we are taking the proper precautions to make sure there is no disruption in any of our transactions.

In a typical mortgage payoff fraud attack, the fraudsters will attempt to provide false payoff statements to the settlement office that contain wire instructions that would have the payoff funds sent to the criminal’s account rather than to the bank that is owed the actual payoff.  The fictitious payoff statement can be introduced usually via email or fax, but sometimes it can arrive as a piece of paper mail.  We have trained our settlement team to be careful when reviewing all payoff statements by emphasizing the following preventative actions:

  • We try to obtain payoffs as soon as possible to avoid being pressured to accept a bad payoff, and to give ample time for due diligence and review of every payoff statement.
  • If the wire information in the payoff statement does not match our database of previously verified accounts and payees, we will call the payee at a phone number that is publicly published, or known by us to be correct, in order to verify the banking information.  We will not call the payee based on the phone number contained in the payoff statement itself.
  • We limit the ability to amend our database of approved payees to qualified staff with security measures in place to avoid insertion of bad details into our list.
  • If we are unable to verbally verified new wire instructions, we will make arrangements for payment to be made by overnight check rather than by wire.

Thanks for taking the time to read our announcement.  We appreciate you and your business, and we want you to know that we’re always striving to provide the best and safest settlement experience possible.

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