Monday, July 09, 2012
From the July/August 2012 issue
Fraudulent title companies and
fake legal firms skate the law
By Grace Anne Glavin, Esq.
A new phenomenon has arisen in the world of Florida residential real estate scams: the creation of the fake title company and the fake law firm. These entities are created for the purposes of:
- Deceiving the buyer into believing that a deposit is being held on a contract pending a closing. In the case of short sales, with their long transaction periods a well known fact, a stolen deposit can go undetected for months.
- Stealing every bit of the proceeds at closing that should belong to the short-sale lender or to the seller.
Crooks are creating names similar to well recognized title agencies or underwriters. They are even creating fake letterhead, e-mail addresses, websites, and correspondences directed to REALTORS® asking them to wire money or send checks to a (fake) title company designated by an absent seller. This title company of course does not really exist, and the deposit or closing proceeds fall into the wrong hands.
Check the website for the Florida Department of Financial Services (www.myfloridacfo.com) to verify the status of a title company. Contact the title company to confirm the identity of the individual corresponding with you, and to confirm the legitimacy of wire instructions.
Check the website for the Florida Bar at (www.floridabar.org) to verify that an attorney is licensed to practice in the State of Florida. The Florida Bar site will also post current contact information.
If a title company or an attorney is not licensed to do business in the State of Florida, they are not regulated as safe to hold deposit or closing money.
The absentee seller is an old real estate scam. A person pretends to be the owner of a home or vacant lot whose actual owner is out of state or out of the country. The representative of this poseur will direct you to place a buyer’s deposit money with a fake title company and/or wire all of the proceed money to a fake title company of seller’s alleged choosing.
The way to avoid all of this crime and embarrassment is to thoroughly check everyone out. Do not be too shy to ask for names and street addresses and phone numbers. And, if you collect any information about a scam attempt on you or your deals, notify your broker and local law enforcement authorities right away.
Grace Anne Glavin, Esq., is owner of Law Offices of Grace Anne Glavin, P.A., and Morgan Title Company and can be reached at email@example.com. She is also a founding board member of the Central Florida Real Estate Council. CFREC provides this column on real estate law issues as a service to ORRA members to provide a general understanding of the law on various topics of interest, not as a substitute for individual legal consultation, and should not be relied on in specific situations without consulting with a real estate attorney. For more information, please visit www.centralflrec.com.