Story shared by Randy Bradley, Mother Lode Holding Co.
A $350,000 loan was taken out against property with a hard money lender, who was told that the “borrowers” (in a trust) were looking to use the equity in their home for some cash to use for flipping and/or other investment opportunities. The lender did not have an existing relationship with the borrowers, but noted good credit scores, plenty of equity in the property, and they had all of the relevant financial information required for loan apps.
Escrow opened, borrowers’ trust documents provided, and the signing was scheduled to take place with a vetted notary in a Starbucks near where the property was located. Signing took place, and “borrowers” provided what appeared to be valid driver’s licenses with photos that matched the signers, and well as credit cards in the names of the borrowers.Funds were disbursed via wire to a joint account in the name of the borrowers.
Following close of escrow, it was discovered that fraudsters were impersonating the borrowers with professionally created (fake) IDs and had opened a bank account in their name with the same fraudulent credentials. Funds were immediately withdrawn from the account, and the lender’s lien was void. Title insurance provided the avenue for recovery of the lender’s lost loan proceeds.
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