- May 10, 2012
- All Issuing Offices
- Mortgage Release Scams
This bulletin advises you of the resurgence of mortgage release scams. These scams can dupe homeowners and cause problems in the public records.
One type of scam involves the transfer of the mortgaged property into a purported trust. The homeowner often has an interest as a purported beneficiary in the trust. The trust then seeks to challenge the existing mortgage through a series of self-serving notices sent to the lender. The notices claim some form of defect regarding the mortgage, e.g., lack of ownership of the note/debt by the lender and/or that a fraud was perpetrated upon the homeowner when the mortgage was executed. A "default" is claimed against the lender based upon the lender's failure to respond to these notices. The trust then "deems" the mortgage extinguished, and records a fraudulent satisfaction or release in the public records.
In another type of scam, an entity posing as a "client advocate" induces a homeowner to pay a fee for an "audit" (sometimes called a "securitization audit") which purportedly forms the basis of a challenge to the mortgage or deed of trust through an "Administrative Default Process" claimed to lead to an "Administrative Judgment" or "final Cease and Desist on the Mortgage."
Please be vigilant regarding any prior satisfaction, reconveyance or release of a mortgage or deed of trust that was not recorded simultaneously with either: (A) a sale of the property with institutional financing, or (B) a refinance of the existing mortgage with institutional financing.
If you have any questions relating to this or other bulletins, please contact a Stewart Title Guaranty Company underwriter.
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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.
- Bulletins Replaced:
- Related Bulletins:
- NL000003 Forgeries
- NY000500 Mortgage Programs involving Trusts to provide Mortgage Relief and/or Reduction
- SLS00200 Mortgage Avoidance Plan/Sham Releases
- SLS00247 Fraudulent Release Schemes
- SLS2009013 Fraudulent Reconveyance Documents
- SLS2010027 Mortgage Challenges
- SLS2011016 Fraudulent Release of Deed of Trust or Mortgage [Revised 09-12-11]
- Exceptions Manual: