What involves title insurance fraud and how to avoid it?
Answer:Title insurance fraud has become a popular type of fraud in America. Mostly, because title companies act as settlement agents and as such they hold escrow accounts for their clients. On the HUD-1 Settlement Statement there will be a lot of fees and some of those are settlement fees paid to the title insurer, acting as a closing agent in the transaction.
Be sure to ask what those fees are if they haven't been disclosed previously to you. If you have been charged a lot of previously undisclosed settlement fees, make sure you investigate those and file a consumer complaint.
Title Insurance Fraud Occurrences
Unfortunately, large title companies are also vulnerable to title insurance fraud within the company. Title insurance officers have been reported to misappropriate funds from escrow accounts for personal use. Also, some major title insurers have been on the spot for possibly charging inflated title fees.
More than 12 states have been investigating title insurance fraud cases. Title agents who have been found to have committed a title insurance fraud may face tens of years in prison.
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