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profnot
41 Posts |
 Posted - 03/18/2014 : 3:35:46 PM
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Sample letter opposing iClose for your use in alerting media and your state's Attorney General office regarding the huge potential of consumer fraud.
Dear
The mortgage industry has developed a new product which has a huge potential for fraud against consumers.
After all the problems with last decade's RoboSignings, predatory lending practices, lack of disclosure, and the use of notary stamps created in the names of nonexistent people and fake commissions, this new system ushers in a whole new way to prey on consumers and does it with the consumers' written and notarized consent.
The product is iClose also known as Smart Close.
Service Link (SL), a subsidiary of Fidelity National Financial, has recently released information and a*****encouraging home buyers to allow SL employees to sign all closing documents on behalf of residential real estate purchasers, borrowers, and sellers via use of a Limited Power of Attorney. The LPoA is to be signed by the borrowers before a notary local to them who notarizes the signatures on the document. Then the LPoA is sent to Service Link.
Fidelity and Service Link call this practice iClose. You can watch their*****at this url:
http://www.servicelinkfnf.com/page/services/technologyAndConsulting/technologyProducts/ServiceLink/Demo.html
Title Source has a variant titled Smart Close.
https://titlesource.iclosefnf.com/Default.aspx
Fidelity National Finance and its affiliates control well over half of the nation's closings. US consumers' exposure to fraud in this new arena is huge.
iClose and Smart Close involve the use of an employee of the title or escrow company who reviews the closing documents with the borrowers via internet and telephone. But since the borrower has signed over the right for the title / escrow employee to sign on their behalf as Attorney In Fact, there is no guarantee that the documents shown on the computer monitor are indeed the documents being signed by the AIF. The consumer is told the final package can be viewed online but how does a consumer know that the true loan documents are displayed?
Thieves and fraudulent borrowers could also utilize iClose and Smart Close. A crook only needs some basic personal information (social security number, etc) to create an account with the title company. The crook could have a notary stamp made in a fictitious name for the LPoA. During the internet/phone closing appointment, the crook would press the "I agree" buttons.
Loans for "refinance with cash out" are especially vulnerable to fraudulent use of iClose and Smart Close. The abuser could be a spouse who does not want the other spouse to know about equity in cash form being taken out of the shared house.
Before iClose and Smart Close, consumers either went to a local title/escrow company or the lender to sign final mortgage papers. Consumers knew the loan officer and the title/escrow employees. If the lender or title/escrow company was distantly located, consumers signed the closing documents with Notary Signing Agents (NSAs) in their area who are specifically trained in real estate closings, have background checks, and have errors and omissions insurance above the usual states' bond requirements. These NSAs serve as neutral third parties to the closing process. NSAs help the consumers understand the documents they are signing.
For the purpose of notarizing the LPoA, iClose and Smart Close allow the use of notaries at banks, UPS stores, boat yards, etc. These notaries are not specifically trained, background checked, and insured for real estate work. It is much easier for a boat yard notary to not understand the parameters of repercussions of invalid ID and the expanse of power a LPoA involves. ID thieves know to use less experienced notaries.
The title/escrow employees acting as AIF for the borrowers are biased. They work for their employer, not the borrowers, and are not neutral. Neutral, third party bias is lost when NSAs are not involved. In these times of high unemployment percentages and scarce job opportunities, these title/escrow employee AIFs are under unusually high pressure to do as their employer wishes.
Please review the iClose and Smart Close practices and involved title/escrow companies and lenders who subscribe to them. The purchase, refinance, and sale procedures for one's home are already so miserable that consumers will agree to almost anything once the package is ready to sign. They are very vulnerable and far too trusting.
Borrower Beware has never been more important!
Thank you,
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Oppose iClose by sending this letter to media, AGs
