Every year, real estate-related fraud drains an estimated $750 million from the United States real estate market, affecting individuals and society at large. People buying, selling, and building real estate trust notaries to ensure the authenticity of the signatures on transaction documents. However, it doesn’t take much for a con artist to forge a notary’s seal.
Notarizations Can be Forged
Consider this example of real estate fraud: A swindler creates a fraudulent deed to make it look like an elderly couple’s second home is for sale when it really isn’t, and an unwitting buyer makes the purchase. The con artist skips town, and the buyer tries to move in—only to realize that people still live there. The elderly couple can regain ownership of their house, but only after a costly lawsuit. The title insurance company also takes a loss to reimburse the deceived buyer, and the scam artist gets away.
Notaries May Fail to Protect Vulnerable Members of Society
Seniors are a particularly at-risk group for real estate exploitation. In a recent case, the son of an elderly woman with dementia used her power of attorney to sell her home and drain her bank accounts of over $240,000. The notary unintentionally assisted with the crime by notarizing the power of attorney even though the son forcibly directed his mother to sign the document when she didn’t understand the effect it would have. The notary’s understanding was that, as long as the elderly woman was the correct person to sign the documents, there was no reason to refuse the notarization.
In another case, a man who falsely claimed to be the caregiver of an older adult defrauded this senior citizen of hundreds of thousands of dollars in assets and real estate. He had help from a friend, who fraudulently notarized forged documents to help steal the victim’s entire estate.
Although these particular examples involved negligent notaries, in most instances con artists don’t even bother going to notaries because the seals are so easy to forge.
Veritable Data Solutions Helps Notaries Defeat Fraud
Seniors, homebuyers, builders, and insurance companies expect notaries to protect against fraud, but traditional notarization uses archaic technology that does nothing to outwit the schemes of 21st Century crooks. Unfortunately, official-looking stamps are easy to fake, and notaries can become accomplices to crimes (usually unwittingly), creating a false sense of security that opens the door to effortless scams.
Veritable Data Solutions is changing all this by improving the usefulness and dependability of professional notary stamps. The smartphone app uses blockchain technology to empower notaries, escrow officers, title insurance companies, appraisers, city inspectors, architects, engineers, and other traditional “trust providers” in real estate transactions. It simplifies existing
processes, makes transactions more efficient, and, in the future, should eliminate many types of stamp forgery altogether.
Other Ways Notaries Can Defeat Fraud
Notaries can take many steps to protect against fraud in the real estate industry.
Professional notaries should take their responsibility seriously and learn as much about the duties of their office as possible to prepare for potential fraud. This includes learning about the different types of powers of attorney and documents used to transfer property. Then, when presented with a high-value document, they can perform the requested notarization (or deny the request) with confidence.
Assess the Situation
It can be difficult to spot signs of fraud, so notaries must be especially diligent when dealing with complex or unusual situations, especially when elderly signers or those signing on their behalf are involved. Here are some red flags to watch for:
- Someone besides the signer is requesting the notarization.
- The signer is allegedly sedated or medicated, and they appear confused, lethargic, or sleepy.
- The signer appears reluctant, and the accompanying individual seems to be pressuring them to sign.
- The signer is agitated or wants to rush the process.
Manage the Notarization
The notary should take charge of the notarization process from start to finish. Ask the signer about their awareness and intention to sign and confirm that they are not under any duress or pressure. It may be best to excuse any third parties from the room so the notary can ask the signer these questions one-on-one. Then, when it comes time to stamp the document, the notary should feel fully confident that the signer knows what they’re doing.
Create a Record
One of the best ways for a notary to defeat fraud is to create a record of the transaction. A detailed journal entry provides invaluable information if the legitimacy of the transaction is ever questioned.
A physical record is beneficial for identifying fraud after the fact, but a digital one can defeat fraud before it happens. Veritable Data Solutions’ blockchain system and AI technology help ensure security with independently validated records and timestamps, making it difficult for individuals to corrupt the system.
Notaries are Gatekeepers
Notaries and various real estate professionals are considered gatekeepers—their role is to protect the public and prevent fraud. By updating the toolkit of these gatekeepers, Veritable Data Solutions is helping them defeat fraud once and for all.
Many responsible notaries have earned themselves the title of Citizen of the Year in the eyes of those they have impacted directly. Take the example of an elderly woman who avoids losing her house because an attentive notary suspects that the signer isn’t truly a trustee or guardian. In examples like these, notaries not only help individuals and society as a whole—they also avoid liability for negligence or intentional disregard.
Veritable Data Solutions is the key to making fraudulent notarization attempts unsuccessful. With this tool, notaries will fulfill their role as gatekeepers, protecting against fraud in real estate and other transactions.