By Hayden-Anne Breedlove, Counsel
Old Republic National Title Insurance Company
Fraud has rapidly evolved into one of the most significant sources of title insurance claims, particularly as real estate transactions increasingly rely on electronic communication, remote closings, and digital documentation. Schemes that once occurred sporadically are now routine, sophisticated, and alarmingly effective.
I. False Owners and Seller Impersonation: A Leading Cause of Loss
One of the most persistent and damaging claim trends involves individuals impersonating property owners to sell real estate they do not own. These schemes are particularly successful when the property is vacant, rented, or owned by someone living out of state or internationally. Fraudsters often communicate exclusively by email, refuse video or telephone contact, and present false identification documents that appear legitimate. Some go as far as using embassy or foreign consulate notarizations, which can be extremely difficult to verify.
A recent claim example illustrates how convincing these schemes can be. A “seller” contacted a settlement office insisting on a quick closing for a parcel of land. The seller provided what appeared to be an authentic ID and a notarized deed bearing a foreign embassy seal. Because the transaction seemed straightforward and the seller presented no obvious obstacles, the closing proceeded as scheduled. Only weeks later did the true property owner (who lived overseas) discover the unauthorized transfer. By then, the sale proceeds had been wired to an account controlled by the fraudster and has disappeared.
II. Vacant Land Fraud: Low Visibility, High Exposure
Vacant land has become one of the real estate industry’s most vulnerable asset classes. Because these parcels tend to be unmortgaged, unmonitored, and rarely visited, fraudulent transfers often go undetected until well after closing. Fraudsters exploit the absence of regular oversight by posing as the owner, providing forged deeds, and insisting that the settlement occur quickly and without in-person interaction.
Recent claims reveal a pattern: fraudsters often choose rural or unencumbered parcels and present identification documents that appear authentic but cannot easily be verified. In several instances, neighbors or local officials ultimately noticed unexpected activity on the property, only to discover that it had already been conveyed to an unsuspecting buyer. The sellers, who were entirely unaware that their land had been conveyed, were left facing a complex and costly unraveling process that ultimately became a title insurance claim.
Nationally, title underwriters report a marked increase in these cases, particularly involving high-value acreage. Fraudsters have become increasingly adept at using real estate agents, registered LLCs, and well-researched impersonation narratives.
III. Refinance Impersonation: Quiet Fraud with Significant Consequences
Although seller impersonation is the more widely recognized threat, refinance impersonation presents unique risks and has also appeared in recent claims. These schemes involve fraudsters posing as property owners to obtain loans secured by real estate they do not own. Refinances are particularly susceptible because fewer parties are involved, communication tends to be more streamlined, and there is often less scrutiny of the borrower’s physical presence.
For example, a fraudster formed an LLC mimicking the name of an existing property-holding entity. He approached a lender seeking a rapid hard-money refinance and provided what appeared to be legitimate organizational documents. The settlement office relied on the documents supplied rather than independently verifying authority with the true owner. The loan closed, the fraudster walked away with the proceeds, and the property owner only learned of the fraudulent lien when a payment notice arrived. As in many of these cases, the refinance appeared unremarkable until long after the funds were unrecoverable.
This category of fraud demonstrates that impersonation schemes do not require complex sale transactions; even minimal documentation, if unverified, can result in significant claims exposure.
IV. Wire Fraud: Catastrophic Losses in a Digital Environment
While impersonation claims can be costly, wire fraud remains the most devastating and fastest-growing category of title insurance losses. A single diverted wire can result in six- or seven-figure losses that are often unrecoverable despite immediate reporting.
Wire fraud claims almost always follow the same pattern. The fraudster begins by quietly monitoring email traffic, sometimes for weeks, either through a compromised email account or a convincingly spoofed domain. Once the fraudster understands the timing and communication patterns of the transaction, they wait for the moment of highest vulnerability to issue fraudulent “updated” wire instructions. These messages are timed to arrive when the parties are busiest and least likely to recognize inconsistencies. The instructions frequently appear within an existing email thread and may even mirror the settlement agent’s writing style.
One recent claim involved a buyer who received what looked like a routine update to wiring instructions. The sender address differed from the agent’s legitimate address by only a single character. Believing the email to be authentic, the buyer wired $427,000 to the fraudulent account. Despite immediate attempts to recover the funds, the money had already been transferred internationally and could not be retrieved.
This example reflects one of the most important lessons from recent claims: technology and email convenience have become liabilities when proper verification procedures are not consistently followed.
V. Understanding Why Fraud Succeeds: Systemic Weaknesses in Real Estate Closings
An analysis of recent fraud-related claims consistently reveals the same contributing factors. Heavy dependence on email communication (particularly unencrypted or personal email accounts) remains a primary vulnerability. Remote work environments, in which staff may use public Wi-Fi or outdated hardware, introduce additional cybersecurity risks. High transaction volumes and pressure to close quickly often lead to skipped verification steps, especially when parties express urgency or insist on remote-only interaction.
Many fraudsters carefully study these weaknesses. Fraudsters often monitor email systems long before they attempt to intervene, learning the language, timing, and workflows of the transaction. They tailor their approach to mimic legitimate communication patterns, increasing the likelihood that a hurried or distracted party will accept fraudulent instructions as genuine.
VI. What Claims Teach Us About Response and Prevention
When fraud is discovered, the first 24 hours are crucial. Claim files repeatedly show that rapid action provides the only realistic opportunity for recovery. Even delays of less than two hours can determine whether funds remain within reach.
Beyond emergency response, claims also highlight the importance of strong internal procedures. Verified phone-based confirmation of wire instructions remains the single most effective safeguard. Training teams to recognize spoofed domains, suspicious timing, and impersonation patterns is equally essential. Consumer education plays a critical role as well; many losses occur because buyers and sellers simply do not understand the extent of the threat.
Additionally, many title professionals assume that E&O or cyber policies will cover fraud-related losses, only to discover that exclusions for social engineering, spoofed emails, voluntary fund transfers, and procedural failures leave them with little or no coverage. Reviewing insurance policies proactively (before an incident occurs) is therefore essential.
VII. Conclusion: Strengthening the Human Firewall
The claims arising from fraudulent transactions make one point abundantly clear: despite advancements in technology, the most effective defense against fraud claims remains human judgment. A skeptical closer who insists on verification, a team member who questions an unusual instruction, or a five-minute phone call to confirm wiring details is often the only barrier standing between a routine closing and a six-figure claim.
Fraud will continue to evolve as long as real estate transactions rely on digital communication. By implementing rigorous identity verification, enforcing wire call-back procedures, educating consumers, and maintaining a culture of vigilance, title professionals can significantly reduce the risk of loss. Every claim teaches us that the final line of defense is not software or servers. It is the people entrusted with safeguarding the transaction.
Hayden-Anne Breedlove
A Virginia native, Hayden-Anne Breedlove received a Bachelor of Arts degree in both Politics and History (with a minor in French) from the University of Virginia and her Juris Doctor from the University of Richmond School of Law. She is associate counsel for Old Republic National Title Insurance Company. Before joining Old Republic National Title Insurance Company, Hayden-Anne clerked for the Honorable judges of Henrico County Circuit Court. She is involved in the Virginia State Bar Real Property Section and serves as the co-editor for the Fee Simple, the state bar’s journal publication on Real Property. She also serves as the academic liaison with the University of Richmond for the Virginia Bar Association’s Young Lawyer Division.
