James and Emma used a mortgage broker, Gary, to purchase their first home. Gary had saved their information and used it to impersonate James to obtain a new mortgage from Tom, a private lender. Gary negotiated for six months of prepayments so that it wouldn’t go into default right away. While James and Emma had no idea that a mortgage was issued on their property, Gary took off with the money and left the country.
When James and Emma received a notice from Tom that a mortgage on their property was in foreclosure, they were shocked and had no idea they had been a victim of real estate fraud. Luckily, Tom was covered and was paid the entire amount of approximately $450,000 by Chicago Title. We strongly believe Gary had connections with organized crime.
While you may be covered under Title Insurance for your transactions, it is essential to be vigilant against real estate fraud. Even though you get paid for the losses incurred in a particular transaction, you still end up suffering other consequences that cannot be covered by insurance – lost investment opportunities, financial strain, loss of reputation in the industry, etc. We encourage you to keep your guard up and avoid situations that can result in such consequences.
Please note that coverage for a matter is based on the specific facts of the claim and pursuant to the terms and conditions of the particular policy issued for the transaction.
