#AllNat Advantage

Sharing knowledge for better business

Russell Gonzales of Alliant National presenting a Crime Watch check to Tirey Smith and Joe Fernandez of Lone Star Title Insurance

Lone Star Title Company Of El Paso: Ever Vigilant In The Fight Against Fraud

With fraud rising across the title industry, it’s important to watch for both red and pink flags.

While working on a recent vacant lot transaction, Tirey Smith and Joe Fernandez of Lone Star Title Company of El Paso came to a similar conclusion about the property’s seller: something was up. Sure enough, their intuition soon proved right. The transaction’s seller was indeed a fraudster. By stopping the fraud, Smith and Fernandez became the latest honorees of Alliant National’s Crime Watch program, receiving $1,000 for their efforts.

Long before deeming the transaction fraudulent, Lone Star Title had been having trouble with their supposed seller. For one thing, they found it challenging to connect with the individual via phone. “This was very unusual because our voice messages usually get a call back, but in this transaction, the seller wouldn’t call back,” said Smith and Fernandez. “She only communicated through emails, including with her own agent!”

However, a lack of communication was the tip of the iceberg. From the beginning, the transaction raised numerous questions. As a vacant lot, the property was assessed to have a low tax value. Yet at the same time, it carried several liens – including one for a substantial amount of $15 million. Additionally, the Deed of Trust for this lien revealed that the seller had used the property as collateral for an equipment loan. Smith and Fernandez indicated that several other notes for equipment loans existed and were connected to the $15 million loan.

The agents thankfully recognized several of the entities listed as the note’s borrower, as Lone Star Title Insurance had done business with them in the past. Because of this connection, Smith and Fernandez were able to speak directly to their point of contact. They confirmed that his wife’s name was the same as their seller’s, that she owned the property in question, and that the property had been given as collateral for the equipment loan.

While all of this checked out, other aspects of the transaction did not. The two agents determined, for instance, that the wife of their contact had an email address that did not match what they had on file. Perhaps most importantly, they discovered that her property was not actually listed for sale. The supposed seller became pushy when later confronted by these facts. She also behaved suspiciously by not wanting to go to the title company to sign and floating the idea of getting their own notary. At this point, Smith and Fernandez determined they had seen enough. They stopped the transaction from going forward and began informing all relevant parties of what had occurred.

“There is a certain feeling of satisfaction when you [help] stop a fraudulent transaction from happening,” said Smith and Fernandez, reflecting on the experience. “[We were] proud that this fraudster couldn’t get one by us.” This perspective is reflected in the larger culture of Lone Star Title Insurance, which has invested significantly in education to ensure that agents are adequately equipped to detect and prevent fraud. Yet as Smith and Fernandez pointed out, cutting down on fraud in the title insurance industry requires a broader approach. All industry stakeholders must come together to stop bad actors and lower the cost of claims. “Programs like Alliant National’s that tackle fraud prevention are both helpful and necessary for the protection of the title agent and the client,” they said.

In short, these programs act as an additional incentive for agents to remain watchful throughout the lifecycle of each transaction, which, according to Smith and Fernandez, can make all the difference in the world. “The only way to guard against fraud is to stay vigilant, ask questions, and always trust your ‘gut,’” they said. “Don’t ignore [any] red flags – or pink ones for that matter!”

By staying vigilant, Smith and Fernandez exemplified what the title industry can be at its best. It is a critical vanguard that protects property rights and makes a positive and tangible difference in the lives of its customers. “The agents and the actual owners of the property were very surprised and grateful that we had paid close attention to what was happening on the seller’s side of this transaction,” they said, echoing this sentiment.

Are you an Alliant National agent that has stopped a fraudulent transaction from moving forward? Learn more about our Crime Watch program!

Tags: , , ,

Leave a comment

You must be logged in to post a comment.
This blog contains general information only, not intended to be relied upon as, nor a substitute for, specific professional advice. We accept no responsibility for loss occasioned to any purpose acting on or refraining from action as a result of any material on this blog.

Let's Connect

Discover more stories and conversations on our social media networks,
or drop us a line on our contact page.

The Independent Underwriter for
the Independent AgentSM