The Role of the Title Industry in Fraud Prevention

Presented by Ed Rybczynski as part of a 2007 lecture series

Fiduciary:

Someone who is legally obligated to place the interests of someone else ahead of his or her own.

Federal prosecutors used the word often.

Accountability:

• Accountability means that you can’t say that you didn’t know.

• Accountability means that you can’t say that you didn’t understand.

• Accountability means that you can’t say that you can’t remember.

“It is a crime to knowingly make false

statements to the United States on this

or any other similar form. Penalties

upon conviction can include a fine and

imprisonment.”

Warning on Hud 1:

Title Agent

Doctor

Lawyer

RESPECT

Challenging C.E. Courses

What Could It Hurt?

Core Values:• Friends and Family

• Faith Based Values

• Personal Experiences

• Virtues

Business Decisions

My Greatest Mistakes:

1. Not selective when selecting sources of business.

2. Formed friendships with realtors and loan officers.

My Greatest Mistakes:

1. Not selective when selecting sources of business.

2. Formed friendships with realtors and loan officers.

You

Your

Underwriter

www.rybconsulting.com

www.title-opoly.squarespace.com

Fraud

For

Housing

Fraud

For

Profit

CONSUMERSDo they know enough to commit fraud without coaching from an industry insider?

Bad Guys Always

Get CAUGHT!

Real estate crimes?

True or False

Lessons:• Fiduciary of buyer, lender, and

title underwriter. • Maintain detailed notes.• Maintain a closing registry.• Disclose material facts to lender

in writing - Cover letter.

Investigations

Signs:

1. A new source of business appears. Why?

2. You start to feel uncomfortable.

Signs:

1. A new source of business appears. Why?

2. You start to feel uncomfortable.

Survey results:

55 percent of professionalappraisers surveyed reported feeling pressured to inflate property values by real estate agents and loan officers.

October Research (2003)

Survey results:

90 percent of professional

appraisers surveyed reported

feeling pressured to inflate property values to levels to make deals work.

October Research (2006)

In the 2006 study, 75 percent of the appraisers surveyed reported threats of “negative ramifications” for lack of cooperation.

Customer …

Not

Always

Right

Customer…your Worst

Enemy ?

The above image was copied from the company’s website. Mortgage Bankers, Ltd. was indicted by a federal grand jury in February, 2007.

Title Profession:

• Title examination

• Proper disclosure

• Fraud Prevention

Best Practices:

• Fraud prevention

• Claims avoidance

• Litigation avoidance

Class Action