Wednesday, February 9, 2011

Fraud in Title: An Example

Ever wonder what fraud looks like in a title search?

This is *not* a release

The document above looks like a release of a deed of trust. The recorder indexed it like a release of a deed of trust. The title searcher regarded it as a release of deed of trust, and showed the lien as satisfied.

Fortunately, the title examiner carefully reviewed the document, and noted that the language was neither consistent with a typical release, nor was it executed by the lender or trustee. After questioning the owner, it was discovered that the reconveyance was indeed a fraud.

While the value of title insurance is often measured in claims paid, the above represents a "shadow benefit" that the claims numbers do not reflect: a claim avoided.