- March 26, 2012
- All Vermont Issuing Offices
- Execution of Documents & Forgery Prevention
Forgeries continue to be a concern in every real estate transaction. This Bulletin will revisit
Issuing Agents are responsible for ensuring that all documents are signed by the proper parties and in accordance with the
Documents Executed Out of State:
When closing documents are to be executed out of state, the Company requires (1) execution in the office of an attorney actively licensed in the state of execution or (2) execution in a Stewart Title Agent’s office in the state of execution.
Documents Executed Locally:
When closing documents are executed locally, they should be executed in the presence of the Issuing Agent and the Issuing Agent must confirm the identity of the Grantor(s) by reviewing and photocopying the government issued picture I.D. or identification card of the Grantor(s).
Powers of Attorney:
Be cautious when parties to the transaction are using powers of attorney. Inquire as to the reason why any party to the transaction will not attend closing, and only allow a Power of Attorney where extenuating circumstances make it impossible to close the transaction otherwise. Issuing Agents should verify the following before accepting the Power of Attorney:
The Power of Attorney is signed by the principal;
The Power of Attorney authorizes and empowers the attorney to take the action required;
The Power of Attorney is witnessed by at least one witness who shall affirm that the principal appeared to be of sound mind and free from duress at the time the power of attorney was signed and that he or she was aware of the nature of the document and signed it freely and voluntarily;
The Power of Attorney is acknowledged by a Notary Public (who is other than the witness unless the Power of Attorney is for a real estate transaction and the real estate is specifically identified in the Power of Attorney and the duration of the power of attorney is no more than 90 days);
The Power of Attorney has not expired by its own terms;
The Power of Attorney is durable;
The named Agent is not the Witness or Notary Public to the Power of Attorney;
The named Agent has signed the Power of Attorney (after the Principal has signed, but before the Power of Attorney is exercised for the first time) attesting that he/she accepts the appointment as agent; that he/she understands the duties under the Power of Attorney; that he/she understands that he/she has a duty to act; that he/she understands that he/she is expected to use his/her special skills on behalf of the principal.
The Power of Attorney is NOT executed by the Executor, Administrator or Guardian of an Estate.
No self-dealing is involved. "Self-dealing" means any transaction, including transfer of property of a principal to an agent, that directly or indirectly benefits the agent or the immediate family of the agent, regardless of whether the agent has provided consideration for the transaction.
Issuing Agents that are presented with Powers of Attorney executed outside of
Issuing Agents that are presented with Powers of Attorney executed by a Trustee of a Trust must contact their local underwriter. A review of the entire Trust Instrument is required in order to determine whether the trustee has the authority to designate a Power of Attorney.
Red Flags for Fraud:
It is critical that Issuing Agents read all documents presented at the closing table, particularly where the attorney/title company representing the Seller is not known to you. Forgers often make mistakes which would not be made by actual companies or closing attorneys. The following are some examples of red flags which require further investigation:
A document, which is to be recorded, appears to be altered. The document shows different font/print, contains erasures, or a portion thereof has been deleted or changed with correction fluid.
The name of the grantor is spelled differently from the record owner. In particular, where the Grantor is an entity and the "Inc." "Corp." or "LLC" language is either inappropriately included or omitted.
The name of the husband/wife joining the grantor is different from the name of the husband/wife who joined that party in a prior mortgage.
Issuing Agents are in the best position to guard against and prevent losses arising from fraud and forgery in the execution of legal instruments. If you suspect fraud, do not accuse the parties, but postpone the closing until further inquiry can be made.
If you have any questions relating to this or other bulletins, please contact a Stewart Title Guaranty Company underwriter.
For on-line viewing of this and other bulletins, please log onto www.vuwriter.com.
THIS BULLETIN IS FURNISHED TO INFORM YOU OF CURRENT DEVELOPMENTS. AS A REMINDER, YOU ARE CHARGED WITH KNOWLEDGE OF THE CONTENT ON VIRTUAL UNDERWRITER AS IT EXISTS FROM TIME TO TIME AS IT APPLIES TO YOU, AS WELL AS ANY OTHER INSTRUCTIONS. OUR UNDERWRITING AGREEMENTS DO NOT AUTHORIZE OUR ISSUING AGENTS TO ENGAGE IN SETTLEMENTS OR CLOSINGS ON BEHALF OF STEWART TITLE GUARANTY COMPANY. THIS BULLETIN IS NOT INTENDED TO DIRECT YOUR ESCROW OR SETTLEMENT PRACTICES OR TO CHANGE PROVISIONS OF APPLICABLE UNDERWRITING AGREEMENTS. CONFIDENTIAL, PROPRIETARY, OR NONPUBLIC PERSONAL INFORMATION SHOULD NEVER BE SHARED OR DISSEMINATED EXCEPT AS ALLOWED BY LAW. IF APPLICABLE STATE LAW OR REGULATION IMPOSES ADDITIONAL REQUIREMENTS, YOU SHOULD CONTINUE TO COMPLY WITH THOSE REQUIREMENTS.