NYS Regulators Form Fraud Unit To Tackle Title Insurance Crimes; Will Target Corrupt Closing Agents, Real Estate Scam Artists

From the Office of the New York State Insurance Department:

• Superintendent James J. Wrynn [last week] announced the formation of a special Mortgage and Title Unit to fight title insurance crimes committed by criminals attempting to enrich themselves at the expense of consumers, financial institutions and municipalities.

• “Complaints alleging title insurance premium theft have increased with the downturn in the economy. The Insurance Department going to be very vigilant and is channeling its resources to enhance its ability to identify and root out this type of criminal activity,” Wrynn said. Wrynn cited the recent arrests of two men accused of stealing nearly $6 million in title insurance premiums, as well as other cases involving complex criminal schemes targeting indebted consumers.

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• “Title insurance agents, in addition to providing title insurance, hold large sums of money including mortgage recording fees, real estate taxes and other fees related to commercial and residential real estate transactions. The lure of these funds, combined with the downturn in the economy, appears to be fueling an increase in title insurance related crimes,” Wrynn said.

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• Wrynn warned consumers to be wary of schemes involving title fraud used by so-called mortgage rescue companies. [...] These groups have targeted financially-troubled homeowners, low income people and others, including legitimate title insurance companies. The schemes have included such tactics as the use of “straw buyers” to purchase properties using false loan applications; the use of significantly inflated property values to obtain mortgages; and the enticement of financially-troubled homeowners to sell their homes in exchange for fraudulent leaseback arrangements.

For the entire press release, see Title Insurance Crimes Target Of New Frauds Unit (Insurance Department to Combat Upsurge in Premium Theft, Other Related Crimes).

Thanks to Bill Collins of Crossroads Abstract, Rochester, NY for the heads-up on this press release. EscrowRipOffKappa