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Hi, I'm Ella Gurfinkel, your host of the AskElla Show and senior loan officer at Fairway Independent Mortgage. On my podcast, I cut through the noise to bring you honest conversations about real estate, mortgages, and financial planning.
I interview industry experts to tackle everything from homebuying basics to complex topics like reverse mortgages, trusts, and market trends. With decades of experience, I'm passionate about dispelling myths and providing clear, actionable advice.
Whether you're buying your first home, refinancing, or planning for retirement, I'm here to help you make informed decisions. Join me for straightforward talk about real estate and beyond!
defix scare me. I I always say that, you know, if only people who commit fraud, who come up with the schemes, if you could only put that energy towards the good cause, can you imagine how much better life would be? Maybe it's only 10,000, but maybe it's 100,000. And if we're all not out there protecting each other, then what good are we for? Congratulations. Kudos. Big big gold star for you for saying that. Sure. So, what else do you see by way of fraud that terrifies you the most? Well, before I get into the AI part that terrifies me, the other part that terrifies me is payoff. Fraud. Um, payoff. That's new and different. That one is fun. And I'm learning.
Welcome to another installment of the Ask Ella Show. And today the conversation is not going to be as fun as the last one was. Today I am talking mortgage fraud and fraud in general as it comes to the real estate transactions. And frankly, today's guest um blew me away. I did my annual continuing education class uh a little while back and Tiffany was one of the speakers at the class and what she had to share was not just mindblowing and terrifying, absolutely terrifying. It was something that anybody who owns real estate, who is buying a home, selling a home, is in any way adjacent to the real estate industry and is even thinking of buying a home needs to be aware of so you don't fall into the trap that some of the examples that we'll be discussing have and you can protect yourself as best as you can. So without much ado, Tiffany Hobgood, welcome to my program and again what you had to say was mind-blowing, terrifying, but also a wealth of knowledge. So tell us a little about yourself and we'll talk about the actual fraud that everybody needs to know about. Well, thank you first of all and I'm glad that um it was terrifying. That is means I've done my job. Um, my name is Tiffany Hobgood and I've been in the title and escort industry for a little over 30 years. Um, fraud is one of my favorite things to talk about and if I've done a little bit of scaring then I feel like I've done my piece. So, look forward to having a conversation today about that and hope to impart some knowledge on everyone listening today. Awesome. So, I'm sure that anybody who's bought a house recently or has been, like I said, adjacent to buying a house recently has seen that at the bottom of every email that you receive, whether it's from us, the lender or from the escro company or the title company, there is something or other a warning about the wire fraud. At least be aware of wire fraud, how you can protect yourself against wire fraud. So, the majority of people usually know about wire fraud. And I will actually let Tiffany talk about that subject first because that to me is one of the scariest thing that can happen to somebody buying a house where you are sending your chunk of money that you worked extremely hard to save up, collect, got it from family, borrowed, you know, scraped together, did whatever. And lo and behold, the escro company never gets your money because you got scammed and you sent off the money to the fraudsters. So, let's talk about that. How it happens, what's entailed? Is there a recourse? I know there are so many questions, right? So many questions. Um, and wire fraud is coming back and coming back with a vengeance. Unfortunately, it's very scary. Um, and yeah, it's it it's unfortunate that people can get taken advantage of with wire fraud. Um, I mean, one of the most important things you can do is know the people in your transaction when it comes to wire fraud. Um, and uh, and make sure you call I'm I'm just going to say it with a disclaimer, your partner with a known trusted number. Don't rely on email. One of the biggest things that we see is when you're involved in a transaction is there's so much urgency, right? Everything's now. Must do it now. And there hundreds emails flying at the buyer in rapid fire order, especially in the beginning of the transaction and then towards the end. So, it's really easy to feel like you're rushed and everything is urgent and fatigued. They get absolutely fatigued from the amount of emails they're getting and the pressure. And that's what fraudsters do. They absolutely pressure them. If you don't do it now, you're not going to close. If you don't do this, it's not going to happen. You're going to lose your home. And so it's a fear factor, right? And so they need to stop and take a moment. So be cautiously suspicious. Always be cautiously suspicious when it comes to sending your funds. Um so you need to partner yourself with someone and and know the the trusted number, right? So, know right away from your lender or from your realtor who to contact because even when you're sending earnest money, you can definitely lose funds right out the gate before you even, you know, get to the closing table. Um, what ghosted title companies, if anyone has heard of that, might be a new term for some people. Um, it's just where a uh potential uh fraudulent seller inserts themselves to sell a property they don't own and they fictitiously put the title company in. It's not a real title company. So, there's example number one. There's example number one. Um, where they will, you know, with with AI today and technology, you can create a a website within minutes and not scary at all. Not scary, right? Um, not that we can't use AI for great things, but that's just an example of where you could create what looks like a very good website, put on there where you can deposit your earnest money, and you're sending your earnest money off to what looks like a legitimate title company, and you're sending your earnest money off to a fraudulent person. and be before you get in touch with the real title company maybe or maybe you're calling the fraudulent title company where they do have loads of people answering the phone pretending to be your title company confirming everything and you've sent your funds off. Maybe it's only 10,000 but maybe it's a h 100,000. It's gone. The amount doesn't really matter because that money is the buyer's money. Correct. And a lot of times it's really hard to claw it back if it's not done within the first 24 hours. It's usually gone offshore, convert it into crypto, it's gone. It's it's not recoverable. There are services out there that can help. You know, your bank might flag it. There are other services that can help you try and recover it, but you know, it can be gone if it's not noticed right away. And usually it's it in those cases with especially with earnest money, it's not known right away. Or if it's closing funds, let's say, you know, you got um an email saying that wire instructions changed or send your funds right away. Here they are. You didn't confirm those were the instructions you'd previously received. You sent your funds off. Then you go to the closing table to sign. Your escrow professional is asking for your closing funds. You're like, I sent those a couple days ago and they're gone. They're gone because the timing. You just have to be so on top of it in order to get any kind of resolution with that. So, I always say be cautious. Always call it. It's time. Take the time when you're getting ready to send it to confirm it and don't ever call the number in the email because you never know. One other thing that I always add and I always tell my clients and that goes both for the earnest money. Uh, usually the real estate agent will be by their side helping them with the earnest money deposit, but I always step in more so even at the back end of things when it's almost time to close. And that's a conversation I literally have with every buyer is first of all, personal checks are a no no. Can't do that. So, it has to be certified funds. And as that, it's only wire or casher's check. Now, with earnest money, you can do person. closing funds just because Arizona specific for those who are in other states, but Arizona has a good funds law. So, we need to have, you know, either um wire or um certified funds with the cashier's check. And same goes, I'm licensed in eight different states. And the same thing actually goes for all of those. Arizona is one of them obviously, but the same thing goes for all of the West Coast, Washington, Oregon, California. The same goes for the East Coast where I'm also licensed. So, it's the good funds law is pretty much prevalent. So, typically we do instruct people to wire the money in unless they're able to get their cashers checks in the day before. Correct. Because you got to have those seasoned and they have to be on deposit so that we're not comingling funds within the trust account. Exactly. Very, very important. And cashier's checks is a place for fraud. I mean, we haven't gone there yet, but All righty. That will be the next thing we discuss. But with the wires, like I said, I always make a point of explaining the last steps to the clients. And that is again, no personal checks for closing, casher check or wire. Casher's check 24 hours in advance. Wire, do not send the money through a wire unless and until you have confirmed that wire and the wire instructions with the escrow company. Mhm. So, basically, huge red flag. Don't ask me for the wire instructions as the lender. As lenders, we're not supposed to intervene or be in the middle of the wire instructions. So, because that creates more openings for hijacking the email and fraud. Congratulations. Kudos. big big gold star for you for saying that because that's another place where the wire the any kind of fraud can happen quite frankly is having a third party be involved. You never want that. You don't want a realtor sending them. You don't want a lender sending them. You want to get them directly from your escro professional and it should be in a secure and safe manner. Um a lot of a lot of companies now have um third party almost like um I don't want to say a portal. I mean, they do refer to some people don't love the portal thing, but it's usually some kind of safe, secure link or a way that they receive it. Um, that's very secure. It's not in an email typically where a fraudster could insert themselves and change them because that's where a lot of fraud happens. Um, it's usually through a safe and secure manner in which you're receiving them. And that's what you want directly from your escro professional so that you know. And then call them and verify them. It's okay to do that. All it takes is five minutes. Absolutely. But that's 5 minutes can save you not just potentially losing your money but also on top of it how much pain and anguish and potentially your life savings. Yep. That is that could be gone in the blink of an eye to a fraudster overseas and gone. Right. And now you've lost your potential home. So always if you don't work with me, which obviously I can't work with everybody. There's just not enough of me to go around. But on a serious note, whoever you work with as your lender, be it a bank, a mortgage lender, a mortgage broker, make sure that you ask about how your wire can be secured and how you can avoid wire fraud because again, potentially you could be losing a house, potentially you could be losing your life savings or the money that you just made through the sale of the prior home or whatever the case may be. So, always be on guard and don't ever take the wire instructions at face value. That five-minute phone call to the escro company will save you from pain in English and potentially losing the home and your money. So, next point that you just made, which I frankly honestly forgot, and that's the casher checks can even be fraudulent. Yes. Holy crap. Like, scary. Scary. Uh there's a couple different ways that people do that. Um, some of it is done in the beginning in earnest money where they'll uh put an offer down. They'll send in a cashier's check and they'll cancel it within, you know, a week um and want their earnest money back and the c the check was no good, but they've gotten funds back from the escro company and by the time we're made aware of it um those funds are long gone and off to the fraudster. Okay, jaw on the floor a moment. Cash check is supposed to be certified funds. They're supposed to, but it's supposed to be drawn on a bank account that you own. How? But when they're when it's an actual cashier's check that's fraudulent, so it's, you know, it's either washed or they've recreated them, um, then they're it's not a real face value uh, instrument. The other way they do that is also present you with a notreal instrument from a bank that's in excess of the earnest money. So, let's say that you, you know, get a contract. I'm just going to throw random numbers out there. or for 250,000. They send you earnest money in for 200,000 and they just say, you know, we're just going to give you more in the beginning. Um, and then, you know, they maybe have an inspection period and they cancel in the inspection period and then they want their their deposit back. That's also a red flag. So, that's usually how we see a lot of cashier's check fraud. It can also happen during closing funds as well where the cashier's check received is fraudulent. So, a lot of title companies will call and try and validate and verify those cashiier checks just to make sure that what they're receiving is accurate. Unbelievable. I know. I mean, fraudsters again, like I said, lots of ways to insert themselves. I I always say that, you know, if only people who commit fraud, who come up with the schemes, if you could only put that energy towards the good cause, can you imagine how much better life would be? Oh my gosh. I know, right? Exactly. Let's do the goodness with it. Exactly. For sure. Exactly. So, what else do you see by way of fraud that terrifies you the most? Well, before I get into the AI part that terrifies me, the other part that terrifies me is payoff. Fraud. Um, payoff. That's new and different. That one is fun and I'm learning. And that one is definitely starting to come out a little bit more as well. And, um, it's it's in respect to wire fraud. Um, okay. So, the payoff statements, a lot of title companies will, well, all title companies will rely on payoff statements they receive from mortgage lenders um to satisfy a owner's lean on their property. Well, in some cases, fraudsters will insert themselves and capture those payoff statements when they come in and change the wiring instructions on them. So, uh title companies have to have It's a two for one. It's a two for one, right? But it's these are a little bit scarier because it can be weeks if not months before a title company can realize if they don't have the proper procedures in place to validate those instructions that those have been sent to a fraudster because it's going to be the owner of that property to be notified that they've missed a payment or to watch that their payoff's been made to notify a title company that it's not happened. So those are way scarier because we can't react immediately unless we're also watching and making sure those payoffs. So extra steps on your title partner's part is to validate and verify that the wire instructions that you have in your payoffs are correct because fraudsters like to also insert themselves in those as well. Unbelievable. Like I said, I'm I'm always learning. Every time I hear you speak, I I'm learning because that that's just another wow. It is. It's It's just scary. It's like every time we think we're, you know, we got ahead of Well, we've got ahead of seller fraud, right? We've got to we we think we've got ahead, but again, frauders will find a way to figure that out. Um then you have buyer wire fraud, you have payoff wire fraud. So, it's like they all the different ways that we send multiply. So, you know, whenever you have an escro professional that's trying to verify and validate and confirm or really in, you know, give you education on wire fraud, it is for a valid reason. Wow. Yeah. And for those who think that escro job is easy, I mean, people think that what I do is easy, but I think none of us on again behind the scenes side of the fence. Yeah. Essos, they wear capes. I mean really they're doing so much behind the scenes. They are just making sure everything is just lined up perfectly and is protected in so many ways. So okay, let's say a payoff fraud occurred. What happens? Does the title insurance kick in and basically covers the loss? Um I mean you know disclaimers obviously for legal reasons but title insurance we're not at we're not attorneys. We're not all the things, but title that I mean that's a big important thing about title insurance, right? I mean, as a lender, if you were doing, you know, a refinance, let's just say we're, you know, the refinance space, you have title insurance that you're in first position on this new property and that that loan was satisfied, right? So, you could potentially have a title claim. If you're the new owner of a property that you purchased and that seller's mortgage was paid, you have title insurance saying that that lean was satisfied. So that's where title insurance is a huge um advantage to have. So, let's segue into that for a second because I don't think the majority of people actually understand the value and the need for for title insurance because as I walk clients, buyers, refinance clients through our disclosures and all the fees, the title and escro fees can be quite hefty and there's usually multiple on the purchase side title policies being issued and dare everybody will ask me, "What am I paying for? What is this?" So, what is title insurance? Well, title insurance, what I what I'll say is it's a one-time fee. You know, unlike any other insurance that's recurring or that you pay, you know, yearly or monthly or whatever. It's a onetime fee for the cost of the loan or the time that you own the property. Um, and it protects you and your ownership for the entirety of when you own it. Um, against any leans, um, also against fraud, which I think a lot of people don't really understand that title insurance as an owner's coverage can also protect you against fraud. Um, also from for mortgage fraud, um, which is if somebody were to take out a mortgage fraudulently against your property, um, it also protects against that as well. Um, so I think a lot of people don't really understand the importance of having it and what it brings to you. So if there's a an lean on your property that wasn't yours, but it was there previously, could be that. Um, any other kinds of things, a lot to get into with that, but title insurance can be very important for you. Fraud, leans, incumbrances, um, any other kinds of things that can come up with uh, property. So nobody can effectively claim that you know they have an interest in the property that you bought because two three generations ago their grandfather was supposed to add them to title and now they're not but they still think they should have a piece of the action. Yeah. Whether it's real or not. Right. So ownership like did the chain of title properly transfer? Um was there um anybody who was deceased in the chain of title? All of those things. Absolutely. because it's from the time you own it all the way back to the creation of the actual land is what title insurance covers. People think it's for the now. It's for all. I thought it was 30 years because I remember so you don't know this about me. Fun fact, I'm going to learn. Um but actually my very first job uh in high school was pulling docks for Fidelity Title Insurance up in the Northwest. Um, I asked a lot of questions as I was doing it and learned a lot on the process. Little did I know back then, I mean, we're talking 9091, uh, that I will end up in the mortgage biz just a few short years later. Um, and then out of college, I actually did title chaining for First American Title. So, I actually was that person behind the scenes doing the title chain going 30 years back. So, I thought it was only 30 years back, not necessarily all the way to the creation of the title on the piece of property. No, it could be that they only changed for 30 years because some people will only go back so long. It depends on the chain of it. What what are the records in that state? And I was always wondering where that arbitrary 30 years came from because it could just have been their requirement because of maybe that's just how far they had to go back. There are other states I've heard where they physically still go down to like their um their little place uh where the records are and actually still microfish them. Um Oh god, I hated that thing. I don't Okay, I'm aging myself with the microfish, but I loved the microfish. Um and so there are still people who physically go down and do searches like in person um and and go through all the stuff. So I think it just depends upon the area and where you are and is things are things digital as far as how back far back people feel comfortable and is it in a rural area is it in you know lot and block area that's been platted like how far back do they there's nothing worse than meets and bounds but that's a whole lot of conversation or sectional all the things right like you said um so I think it just depends on what where are they comfortable with who title insured it last how comfortable are with that so there's lots of different factors to those kinds of things but But your title insurance is is saying you own this piece of property. And of course, there are exceptions to every type of insurance, right? Of course, we have to say that. Um that's where all the writers and exceptions come into place, right? Limits on coverage and all those things. Um just with any kind of insurance. And that's the nice thing about what the title search gives you when you first, you know, are peeking at your property. Title insurance is going to tell you like who's an owner of the property. These are the requirements the title company has to do to clear it. And then also these are the exceptions like the easements and the restrictions and all the things that come with your property so you know what you're getting with your property. So it gives you a lot of information. Thank you so much for explaining that because like I said I I don't ever claim to know everything about a subject just because the moment you think you've seen it all something else pops up. Oh absolutely. So it's always learning and it's just never ending. Wow. So, thank you because again, I never claim to know everything, but I'm always open to learning the new things. Oh, yeah. And and by the way, I I mean, there are title people that I know who are wicked smart in that area. Absolutely. I've recently talked to a couple of those and it was like, wow. Yeah. I I don't want to do what you do. Amazing. I I don't want to commit to memory what you have. I already have enough in my head. Absolutely. Um, so speaking of title insurance, and of course that's where I segueed because title insurance does cover certain things like those claims, old leans that slip through the cracks or in some cases the wire fraud. What kind of speaking of title but not title insurance per se, what kind of title fraud are you seeing? Because we all have seen commercials um we all have seen TV personalities uh you know those ads pop up both on TV on YouTube on the internet to protect your title uh title scams title fraud how real is it and how rampant is it and what's entailed again lots of questions one big heading lots of little questions So, um, it's been about a it's about a year since we've stopped an actual live sale of a fraud transaction. Um, and when I say we, it was just a company that I was with. Um, they actually got an a a contract that was um not the actual owner of the property. So, how do you know that? Um it was based on um some red flags that we saw in the transaction and uh the processes and procedures that the escro professionals do. One of them is validating, verifying ID and making sure that you're working with the rightful owners of the property. Uh because again, title insurance covers fraud. Um we want to make sure that we're working with the rightful owners. We don't want a buyer to get in a property just to realize that they don't own it and they're going to have to somehow remedy that. Um, so it's it's happening. So, of course, you first you have your deed fraud and then you have seller impersonation. Two different things. Awesome. Yeah. So, deed fraud is when somebody actually um deeds a property that they don't own or changes ownership in it. That can happen outside of a title company. Okay. people. I I I've actually seen them in the records. Um they can look very good, they can look really bad. Um and that's just where someone will fraudulently sign over a property that they don't own and then they will sell it in their their name um or a fictitious name that they've now created with this new deed that is fraudulent. They're typically uninsured. Um, and title companies have processes and procedures in place to want to verify and validate an uninsured deed. Uh, and that usually will stop things um, when we can not be able to get the person who was the rightful owner to verify that they did indeed sign this document. Seller impersonation is when someone is impersonating a rightful owner of a property trying to sell. Uh, and that's when you've got a lot of process and procedures in place by your escort professionals to verify the rightful owners of the property. Right. Right. But like how like who comes up with that and why? Well, I guess not why. I get why. Yeah. Trying to get the money, right? But how? Well, um, so a lot of times they'll um they'll reach out to, you know, potential real estate agent to try and sell the property like uh they start with they started with vacant land a long time ago. I want to say four years ago, maybe longer now, they started with vacant land. I guess I'm counting my blessings in my head as you're talking that I've never come across one of those. Thank God. Thank you. Um yeah, you're very fortunate. Um but they've also gone into non-owner occupied properties. So you've got, you know, maybe a property that's vacant and so a fraudulent, you know, a fraudster will be like, "Hey, you know, I'm ready to sell this property. I saw you online realtor. You're amazing. you have great reviews. Will you sell this property for me? I mean, they they'll they may do it, they may not do it. We've had um real estate agents, amazing realtor partners, call us and ask us, hey, can you help? We are I mean, title companies are incredible partners and they're like, you know, I want to verify that I'm working with the rightful owner of this property. Yes, absolutely. Well, the better agents really when somebody approaches them about selling the property really should be pulling up the very basic minimum information. Yeah. On the property. And they can do that. But I'll tell you really good fraudsters if they have stolen someone's identity. Oh. Which in some cases when you dive into these, they've got enough basic information about the seller because they've stolen their identity that they can get past some of that stuff. Um, even when you get down to closing, if you actually have them sign stuff, like we've worked with the attorney general's office, taken deals almost all the way to closing just so we can get signed documents. They have real people's social security numbers. They have their addresses. They they've taken their photo IDs and just changed just the photo and the signature on it. It's all their real information because they're speechless. Exactly. Literally, I'm sitting here like so good. It's just so good. That's why um when I give a lot of these classes and I talk a lot about fraud, I I encourage people not to push back on the processes and the procedures that the escro professionals put in place to verify and validate that we're working with the rightful owners of the property. And that's why it's so important because we want to make sure first of all, we're protecting one of the biggest transactions that occurs in people's lives. all of your money that you're putting into this transaction because as a buyer, if you bought a property from a fraudulent party, now we're going to potentially maybe have to unravel it, you know, um or if you're a seller who owned this property that got fraudulently sold. Okay, now how do we un undo this? So, we're all just trying to protect everybody in this transaction. Um, and and maybe there's a few hoops you have to jump through to confirm and validate you are the rightful owner, but just think of what it's just saved you and and and all of what could happen if it were fraudulent. It it really is just a few minutes of your time to do that, right? I mean, I would much rather, you know, have to, you know, scan my ID and verify that I am Tiffany Hobgood than to have someone come and and sell my property out from underneath me because they'll do it with vacant land. Um, free and clear properties, unencumbered properties. Um, well, those are easier to slip by because there is no payoff. There is no Right. But they'll even do it if it's slightly encumbered because if they've stolen someone's identity and they have your social, you can get a payoff that way. So, you have to be really careful, you know, not just because, you know, maybe it's um it's a rental and so there's an investor buying it and they don't need to do inspections and so we're not disturbing the tenants and we're going to go ahead and do that. Right. Exactly. We're shaking our heads, but it happens. So, we're still seeing a lot of different things. It's not just make it land anymore. So, we just have to be careful, cautious, check all the boxes, and make sure that we are doing all the steps and that no one tries to rush us through those. Once again, take a pause. Yes. Think, allow everything to happen. Allow the professionals do what they're supposed to do. Yes. Do not rush the professionals. Do not rush. And and no p and the push back. A lot of times there's push back where I don't want I don't want to have to do that, but I'm here to protect the one of the biggest investments of your life. So allow that. Every time I get push back from clients um and it happens more often than I care for to be honest on certain things that are being asked for whether it's from us, from escrow and title, from any third party that's involved in the process. I try to explain it and break it down that you know there is a reason it's being done. It's either a for your protection or b it's because somebody somewhere sued for the same reason. So now there are extra hoops to jump through for all of us. Right. That's the reason that the closing packet is over 100 pages long when back in the day it used to be less than 30. Yeah. So and back in the day even further back in the day it used to be on a handshake you know spit and handshake. Yep. And now everything is a pile of paper. Whether it's electronic or wet signatures, it's still a lot of paperwork and department of redundancy because somebody somewhere screwed the pooch for the rest of us and basically now we're all paying for it. Right. Right. And that's why the cost of title insurance is so not cheap. It it it's it's it. But I mean it is. I I would say um Alta, which is the American Land Title Association, did a a big and I don't have the stats with me um or or I would give them to you and I can even get them to you. You could put them in, you know, somewhere, but um they did like an analysis of what the cost of title insurance was and it's very minimal in in retrospect um of of what other insuranceances cost over the life of the time you own your property. I mean, in a way, yes. It just, you know, when you're looking at the documents and disclosures up front, that's a chunk of money. It seems like it, but then when you look at what it gives you and the protections that it gives you, but nobody really understands what the protections are. They don't or what the reason for the protections is, right? So, I mean it but it's an incredible thing that you can have and it really is a small investment to make. Absolutely. in in what you've got and I and I'll and I'll just because I have to make sure I touch on it is is the AI piece of fraud just because one of the things that scares me also is the voice cloning piece of AI um and what it can do with um I'm going to do a class on it and and and show the power of it is because we talk about calling and verifying and vetting um I know that my voice has been cloned. I've actually gotten a a voicemail from myself from somebody calling me and it's my own voice. I mean, I know the phone numbers get cloned. I get occasionally phone calls correct that are coming literally from my own number like how on green earth. So, for an example of what I can give is that let's say you're in the middle of a transaction and it looks like it's coming from the title company, your realtor or your lender and they're asking you to send funds and it's going to sound like your realtor, your lender or someone because we are on the internet. That's insane. And we are easily completely insane. It's completely insane. But I've it's already happened to me and it's called me. So, I mean, I know it can happen. But this is where even if they're they're phone cloning, so they can clone the phone number to look like it's calling your phone, even if you save it in your phone, the best thing you can do is be so just be cautiously suspicious, as you've heard me say, and just say, "You know what? Can I give you a call right back? I I just I've got a something I got to do. I'm going to call you right back." What they can't do is intercept the call back when you're calling the number you know you're supposed to call to verify the information because I I've seen it where they Okay. How long before that happens actually? I don't I don't know. I mean valid question, right? It is a valid question but right now they can't do that. Okay. So you can so because I've seen it and I'm actually going to do a class on it um where they will call and say hey and it will interact. Hi, this is so andso from XYZ and I just want to make sure confirm you just got those in wiring instructions I sent you so that you can send those funds for your closing tomorrow. And then you would say, "Yeah, I just got them. That's great." And then we'll interact again. It will actually have a conversation and that scares the living daylights out of me. Okay, I'll just say it. I mean, it scares the living hell out of me. Yeah. I mean, this this is Yes. I'm not entirely PC or appropriate even even online, not just in real life, but online. Yeah. But what the actual health? Yeah. And so it's like, so anytime I would not be offended if I called somebody and they told me, you know what, I just I got to take this call real quick. Can I call you right back? Absolutely you can. Because if if for one minute they were suspicious that I was being cloned, I would not be offended if they wanted to call me back to confirm that, you know, or have some kind of a, you know, um some kind of a a known thing between the two of you like, "Hey, what was that book that I loaned you last week?" you know, something that only the two of you would know that a fraudster wouldn't be able to come up with or some type of AI wouldn't be able to generate that's only personally known something because otherwise this AI and the technology that's going on, it's advancing rapidly. One of the things I've heard and this completely, it could be a totally different subject, but one of the things I've heard is, you know, we all get a lot of spam calls. That's just kind of the nature of the beast. Yep. A lot of them are spoofed. Spoofed numbers to never answer a suspected spam call to never answer it with your name. Uh to never say yes. Mhm. Because that's exactly what is, you know, they're basically trying to voice capture you with your name, your confirmation so that it can be spoofed further. Yes. And so so you're confirming that. I have heard that as well. Um that a lot of times when you're answering those those spam calls um even when they want you to confirm something that you might actually be confirming to that you're purchasing something and you may not even be knowing it. Yes, I have heard that as well. Um so I don't answer that those calls. I even have the new thing set up on my device where it it'll um it filters like it asks people who's calling before they even come through into my phone if it's a it's a number I don't know on my phone so I can see it first. But that's how it captured my my voice clone for me is from your is from that filtering um and I'm like oh look I've been cloned because then it said who's calling and then it said my name and it was me my voice. Bam. and it probably got it off my voicemail quite frankly, but it's okay. I'm like I'm all over the internet, you know. Same. I'm all over the internet, social media, internet. Um I do use an answering service instead of voicemail. Um so that acts as my call filter to be honest because if it's spam calls then most likely the answering service is just going to not take it. Yeah. or the the spammers hang up, but there's been a few instances where in the mortgage realm, you know, you don't know, even though I have a caller ID, still a lot of calls come through and there's been times when agents or escort companies, title companies or professional services have been flagged as spam by somebody else. So now the caller ID picks it up as spam. So when I answer it, I it depends on the area code, I guess. Sure. Because if it's an area code from somewhere I don't do business in or don't normally get a lot of calls from or it's a call I don't expect, I will let it just go to voicemail, it will reject it on my device and send it to basically not voicemail but answering service. But if it's a phone call from the area code, even if it says potential spam, right? There are a lot of times when I will answer because it may be a real estate company calling to verify somebody's pre-approval. It may be a potential client. It could be. I mean, there's so many potential possibilities that a lot of times I would answer, but I've learned not to answer with this is Ella, or you know, this is so and so. I just answer with a hello, if I'm not sure who that is. Yeah, I am famous and people will know this. I answer my phone, hi friend. Love it. I just do. I absolutely love it. They will. That's just how I answer the phone. That's just how I am. And so I I never Yeah. say, you know what, a lot of people will answer this is with their name or if I know who it is, I will answer with my name. Yeah. But but if I don't know, like I said, usually you will get a a fairly angry sounding, you know, sometimes Russian accented. Hello. But sometimes nowadays with the phone cloning, I don't even trust that because it can look like my husband's calling and it's not him. So it's like I don't I don't I don't trust that nowadays. So I answer the phone and everyone because in my life everybody is my friend. So there's that. Same. Exactly. So back to the question about the title um and more so the title log services. I mean yes the credit lock. Okay. You can do the same thing without paying somebody by just freezing or putting a freeze directly through the bureaus at no charge. But what about title lock? How real are those services? Is something that I've always been wanting to ask somebody who knows? Because how like how can actually
how can actually a title be quote unquote locked when it's public info? you can't remove it from public information. And to I guess give the viewers and listeners more background, what I'm asking is whenever you go through a real estate transaction and there is a title change, meaning you have been deed onto the property, you've been added to title, you've been taken off title, you sold the house, you bought a house, the piece of paper that declares your ownership to that piece of property is called a deed. And depending on the state, depending on the part of the country, the deeds vary slightly, but it's still a deed. We all refer to it as a deed. That deed as long as well as the trust deed, meaning the declaration of what you owe and who you owe it to without actually spelling out the exact terms. That's your note. Those two documents get recorded at the county level and they become public record. Therefore, they're now public knowledge. Back in the day, we had to go to the courthouse and yes, use the lovely microfish microfilm machines to fish out the deed information. Now everything is electronic and online and it's fairly easily found. So when something something is already public record, how on green earth, can you quote unquote lock it or protect it? So I've actually spoken to this company that's doing the title lock and and they do have a great premise. Now, it's my personal opinion that this will could potentially cause some issues um because it's really kind of a cloud on title. What they're because they're wanting to record a document um that basically in order to transfer title, you have to go through their services to get a certificate to ah so they're trying to prevent basically fraud from happening. Kind of like the freeze on credit. Mh. Where you can't really you go to apply. I mean, I fall into my own trap at least once a year. I don't really apply for credit much. I've got enough, right? But every year I go to renew my mortgage licenses and my credit does need to be pulled by the regulators. And every year, because it's only once a freaking year, I forget that I have a freeze. So, every year I do my renewals. I pay for the renewals and then I get a smack in the head. Unfreeze it. Unfreeze it. So I have to go back unfreeze it then refresh the the renewals. It's a pain in the rear. But that's what freezing does basically. It's you know nobody can really yank your credit without your permission. Yes. So how I mean can't so I have concerns though and I have and by the way I've expressed this to the company. So this this these are my personal concerns is like you know how do they handle the per because it's it's the it's one person if you have two people on title one person does this authentication with them and all the things you know to lock it and get this document recorded with a QR code. Well QR codes can be used for fraud. I was going to say a fraudster isn't recording a QR code on this. Um, so that that was of course my my first thing. Um, my second thing is what if the company goes out of business? How does this right? How do we get these off of the the properties? What if people get divorced and the person who locked it doesn't want to release it? Um, I mean, it's already bad enough with divorces when one of the parties doesn't want a divorce decree or not. One of the parties, I actually have one on my desk right now, right? divorce decree and all, but the other party doesn't want to sign the freaking deed, so we're stuck, right? Or this division of proceeds, and that's a whole another converate. I mean, it can come up in so many different ways, right? Um, someone passes away, you know? So, I had a lot of questions about it. Um, and it it just is another level, another thing for us to deal with and more paperwork and more, you know, I feel like just validating and verifying identity and having sellers going through the identity validation and verification process um would help that also. Um, and of course the the county recorders have a way for you to sign up um to get the title alert system. So, I know it is postc closing um you know where you will get notified if anything records on your property. So, with that you you go to the to the Maricopa County um recorders office and you can easily sign up with your name with an entity with a trust any of those and you will be alerted immediately if anything records in those names or entities or trusts. Um now it is post not pre obviously but you would be know instantaneously not months later or years later where you can get somebody involved an attorney involved or whatever to to quickly reverse it. Um but so if you haven't signed up for the title alert system go to your county and do that wherever you own properties um and and sign up for that. And I know other states are working on other things to help prevent fraud, which I love. Um, but that I I feel like is is a little bit better um than trying to to cloud title. That's my personal opinion. CL and again for those listening cloud title translation it just means there is another item that's clouding hanging over your title another document that needs to be cleared in order for the next transaction to take place. Right? So it' be a requirement um as part of the transaction u whenever someone goes to sell it would be a requirement the title company would have to clear in order to transfer the property free and clear to the new buyer. So again, another uh layer that we have to go through in order to transfer the to the property. So that's why we call it a cloud. It's interesting. Um it's um it's interesting in the way that they do it or the method that they use to do it. Because as you were talking, I was thinking to myself, and I know not every every state has it, but I'm coming out of the Pacific Northwest, Oregon specifically, where I've done business for gosh 30 years next month. Um, Oregon a few years back came up with a death deed. And considering that most of the lending is done nationwide, I've now had a few transactions where I had to jump through a few hoops with uh even underwriting because the death deed goes on title. It's basically I can bequeath the property to my heirs ahead of time. It avoid presumably it avoids going through probate. My trust attorney says not in every case. It has to be done just right. So, as everything, seek legal advice, right? Uh, and I'm not it. Yep. But, I mean, because anybody can download the test deed off the internet and basically get a report in the county. So, if I, like I said, I wanted my kids to inherit my home or not have to go through probate again potentially, I can just add them to title at the time of my death automatically, but I record the deed now. Therefore, the death deed, but it goes on title. M and like I said with, you know, considering that it's a very localized state thing and there is 50 states and the lending is done nationwide, lenders are making us jump through more hoops because of that damn death deed because now we have to actually pull the copy of the deed and show that it's a death deed. It's not additional parties on the loan. Sure. Sure. And on title. Yeah. And Arizona has the beneficiaries deed. Other states may have something like that, too. Um, right. It's very similar. So, it gets recorded, but it doesn't actually go into effect until the death certificate's recorded. Right. Well, okay. So, it's effectively it's the same. It's the same. Yeah. So, it just says that, you know, upon my death, I want the property to be transferred to these individuals. It prevents probate. Again, not an attorney. Presumably, allegedly. Yep. Yep. This is what the intent of the document is. I'm just going to, you know, seek legal advice. Seek legal advice. seek you know um you know your estate planning because that you know your estate may be different but they do have such a document and that is the intent of the document is that you know it would you know you you state here's how I want the property to be transferred to so it kind of reminded me of that type of a deed where you know basically in case of transfer jump through more hoops so you're absolutely right actually and again I was wondering how it's done so knowing what's behind It actually I guess makes me personally less inclined to go through something like that or if and when my clients ask me about the title lock services to kind of give them the pros and the cons that it may become more of a debacle down the pike than an actual protection. Yeah. I mean definitely look into what you think works best for you, right? Um again, this is my personal opinion. my personal opinion, I I wouldn't obtain it. I have signed up for the for the title alert system through the counties u for my personal property. Um and you know, I just don't feel like the lock is is good for me personally, but definitely make your own decision based on what you what's good for your fit, right? Yeah. Exactly. So, what I mean, we can talk about this for hours. We Oh, yes. This could be just, you know, multi-part series. what other fraud types that folks need to know about so they don't get suckered in um and taken for their money or lose a property. Mhm. I would say um you know cyber security is another thing to be aware of is and not to get into like cyber security specific but just email you know how how are you watching what things that are being emailed to you and are you getting it from the rightful person? Do you have certain email things protected? Just look at how you're doing your email, right? Do you have, you know, um are you not using the same password on everything? Um do you have like uh two-factor authentication set up? Because a lot of fraudsters will insert themselves into somebody's email. Absolutely. Just to kind of watch um and see what's going on and then insert themselves. Yep. And in as much as I freaking hate two-factor authentications with a passion because literally everything is two factor authentication. The email, the this, the that, the other. At the end of the day, I understand the purpose behind it. Yeah. So, I may hate it. I may be cussing under my breath as I'm going through it, but I understand why it's needed. Yeah. And its purpose. So, I'm not saying it makes it, you know, a lot more palatable. It's still a pain in the ass, but it's needed. It's definitely needed. And I think there just just the the the extra layer of security that it gives you. Um, you know, for all the people in the transaction, knowing that when you're dealing with, you know, the free email accounts that you've added extra levels of security to them um will make it harder for a fraudster to be able to get into those accounts. Um, and then a deep fakes. Deep fakes scare me. Um, for those who don't So, and the reason I say that is because a lot of um communication we have nowadays can be done electronically like we're on Zoom, we're on FaceTime, we're, you know, we're we're we're having those communications in those conversations. And question becomes is are you having a conversation with a real person? Are you having a conversation with someone who um has just layered a face over themselves so that it looks like you're having a conversation with me? um you know, so those kind of especially when you're trying to verify and validate that you're talking to the right person. So deep fakes are another thing. Um I've seen them happen. Um there's been a lot of people who when they're trying to um in real estate transactions, we want to see a seller. We want to actually get on a video call with a seller and validate them because they're out of state or in another country. And so we want proof of life. So we'll, you know, get on a video call and we'll start asking them questions and we'll start going through those kinds of things. Um, and there are ways you can maybe tell now it's getting really good today. I'm just going to say it. It's getting really, really, really good. I mean, and really scary. And in classes I've taught, I've actually deep faked myself. And it's good, but it's not like real good, right? So, um, but it's, you know, you've you just got to know and there's different ways you can kind of, you know, make people really move around a lot, watch the background. You know, it used to be, you know, the the the lips and the hands. They've gotten that down now. It's Yeah, I know, right? Uh, but a lot of times it's about the skin, the hair, uh, the teeth. Those are kinds of things you can kind of look for. But you also want to do a lot of movement. get them to move around a lot because if they got green screens or they're doing other things in the background, you can catch the green screen edges. Yes. As they move or if they've got face layering now, some of the things are really, really good, but if they're doing a lot of movement and doing other things or putting things, you know, that might mess those kinds of things up. So, that's another thing that scares me when people are just trying to pretend like they're somebody else or they've created an image and they're they're kind of looping it and they've got it with pre-programmed language and that's how one was caught is it was it just looped eventually. So yeah, I mean in the real I mean in the real world when when we talk about fraud nobody really thinks this in the real world again real world really in air quotes anymore because everything has become digitized and online. So out in the world um when you talk about fraud, people just assume you know fake documents or you know falsified payubs or W2s or bank statements which believe you me I've seen my share of back in the day and it was terrifying back then. Um some of them you could spot from a mile away. Some of them you had to look closer and actually look at the numbers like damn this thing looks good but I got you I got you. Now the fraud has moved on to a whole different level where entire sales are being hijacked where properties are being hijacked not just you know your [ __ ] payub is being generated right but that's where I think the awareness needs to come forth because I haven't again I I've been extremely lucky I'm extremely thankful to God that I have not been in one of those fraud galore deals where my buyer was risking losing their earnest money. Have I come close with a couple of clients? Yes. And nothing terrifies me more than that than a client losing their hard-earned money and losing the house potentially. But have I been close to it again? Yes. Have I do I know people who actually have been involved in those transactions where the money was wired fraudulently? Yes. And absolutely yes. And not every single case makes the news. So you don't necessarily hear about it a lot or see it a lot. But nonetheless, it does happen and it happens often. So I just want to bring as much awareness as possible because that's what happened when I heard you speak. I immediately thought that I need to bring you on. I need to interview. I need you to talk more about the fraud because it's not just the professionals that need to know because yes, we get to hear it, right? I mean on things like occupancy for fraud sorry the fraud types that most of us hear about the most are fraud for occupancy that's when it comes to the consumers meaning you know somebody's committing fraud to get the loan to get into a house that's like one thing that's nowhere near I think the terrifying level of what we're talking about both with AI both with stealing somebody's title both with uh deep fakes I mean again fraud for occup occupancy. I'm not downplaying that. It's wrong and it's real. No downplaying that. But this takes things to a whole other level because it's the next level of scams. Yeah. And they're only going to get better and they're only going to get worse. Mh. In terms of the magnitude. They're going to get better in terms of technology and a lot worse in terms of magnitude. Yeah. And if we're all not out there protecting each other, then what good are we for, right? And if we can just bring a level of awareness for everyone involved and they do one additional thing to protect themselves, then we've made a difference. Literally stop, take a pause, think, call the parties in a transaction that you actually know and dealt with, your realtor, your loan officer, your escro officer. You may not be dealing with the estro officer as much as the loan officer and the realtor, but bring up if you have any type of just a smidge of suspicion. Bring it up to the parties you do know, the lender and the realtor, and they will redirect it to the escore company and the escro company will step in and put this protective bubble around you to protect your money, your potential purchase or your title to the home. Absolutely. Tiffany, thank you so much for coming on the program today. I again, you terrify me. Well, not you personally. My stories. I love your stories. They they're absolutely terrifying. But it's that terrifying aspect that makes it so impactful that what's out there, what we don't know and it's out there. As um Dan Kennedy used to say, and it's he's a great marketing guru that um I've learned a lot from. Um he used to say, just because you're paranoid, you're not paranoid, doesn't mean they're not out to get you. I love that. So it's not that I'm paranoid, but there's always something that can get you. know absolutely the more you know. My gosh. Thank you so much for having me. It's been a pleasure to be here. It is my pleasure, Tiffany. Thank you again so much for coming and sharing the info. It's invaluable. Thank you. And I'll see you on the next one.