Real Estate Fraud Notification (REFN) Solution from CoreLogic
As property fraud schemes become more prevalent and sophisticated, how prepared is your jurisdiction to protect homeowners?
According to CoreLogic’s 2023 Mortgage Fraud Report, in the second quarter of 2023, 0.75% of all mortgage applications were estimated to contain fraud, or about 1 in 134 applications. Across most segments of the real estate industry, risk is increasing: Since Q2 2022 our data tracked an increased risk of fraud for 2- to 4-unit purchases (up 23%), 2- to 4-unit refinances (up 20%), jumbo refinances (up 7%), and jumbo purchases (up 3%).
And these figures do not account for the many other types of property fraud.
Real estate fraud involves committing fraudulent activity in connection with the purchase, sale, or financing of property. These scams can take many forms, spanning mortgage and title fraud to grand theft.
Moreover, fraudsters are inventing new ways to access a property’s equity, or the deed to the property itself, often targeting the most vulnerable of populations like seniors with significant equity in their homes or non-native English speakers who may be manipulated into signing documents they don’t fully understand.
Uncovering and Prosecuting Real Estate Fraud
On-Demand Webinar
However, anyone can be a target, and with the rapid rise in home values, property crime can be lucrative.
A crime under state and federal laws, property fraud can result in jail or prison sentences. However, often homeowners are not aware of the fraud until it is too late.
Hidden Theft
Recording fraudulent documents on property can be deceptively simple. According to the California Department of Real Estate, county recorders are “not responsible for verifying the validity, authenticity, or legitimacy” of recorded documents. Therefore, anyone can potentially present a document at their County Recorder’s Office.
As a result, a property owner may not find out about a fraudulent deed until they sell or refinance their property, which can lead to enormous challenges in clearing a title.
A Solution for Uncovering Fraud
In a recent webinar, CoreLogic presented a new Real Estate Fraud Notification (REFN) solution for detecting real estate fraud. This solution is designed to improve the workflows of district attorneys as they work to protect homeowners and prosecute criminals.
Fraud notification programs are a valuable tool to help identify real estate scams. Notifying homeowners of recordings on their properties — including grant deeds, home equity lines of credit (HELOCs), and foreclosure documents — can often be their only opportunity to learn about fraudulent activity on a property.
CoreLogic’s solution supplies homeowners and district attorney offices with copies of these recordings, providing early warning of potential fraud. This early warning gives homeowners greater financial protection and gives prosecutors more time to focus on investigating and prosecuting criminals.
The data powering the CoreLogic REFN solution covers more than 99.99% of all U.S. properties. When a recording is made, we match it against our property data to confirm accuracy as well as identify inconsistencies and potential fraud. The image below reflects this automated process, from recordation to conviction.
The REFN solution is scalable to districts of all sizes and is customizable to meet the specific needs of each jurisdiction, with costs depending on the volume of recordings per jurisdiction.
“We are setting up a continuously monitoring solution, where transactions and specified recordings…are automatically flagged,” explained Jack Cartledge, CoreLogic Product Manager. “This really is an end-to-end solution that empowers homeowners and district attorneys to tackle these scams head on.”
This trusted service is currently used by two of the largest counties in California.
Available Funding
While most agencies struggle to obtain funding for special projects, in some states there may be finances available to assist in standing up fraud notification services.
In the state of California, for example, California Code GOV § 27388 states that money placed in the Real Estate Fraud Prosecution Trust Fund shall be used “to fund programs to enhance the capacity of local police and prosecutors to deter, investigate, and prosecute real estate fraud crimes.”
Local agencies are encouraged to explore these alternative funding sources, which may in fact be applicable for partnering with CoreLogic Real Estate Fraud Notification solutions.
Uncovering and Prosecuting Real Estate Fraud
On-Demand Webinar
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