[Transcript from video]
Eric
Hello, I am Eric Odum, the Broker for Florida ROI Commercial Property Brokerage here in Tampa, Florida and wanted to take just a minute to introduce one of our attorneys that we use on a regular basis, Larry Silvestri. Larry, correct me if I’m wrong, I think you have over 35 years of experience in real estate law practicing here in the state of Florida. Yeah. Now, I really appreciate you taking the time to join us today because there’s some, a point
Larry Silvestri
That’s correct.
Eric
important issue that you brought up. You sent me an email from an article that you had scribed for the Tampa Times about title and fraudulent title and it really kind of scared the life out of me. So I was like, okay, well, I think people need to know what’s going on here. So maybe you could just sort of start with what the issue is here and we can go from there.
Larry Silvestri
I’d be happy to, Eric. So it for me it started with these commercials on TV for something called Home Title Lock and the commercials are generally set up as a fraudster who had been doing this before tells everybody how easy it is and that you need to sign up for Home Title Lock which is something like Life Lock on your credit and it kind of
got to me because I’ve been a real estate lawyer for many years. I actually started in Michigan. I was in Ohio. I’ve been in Florida for over 20 years. And most of my career, I was in-house counsel with real estate development companies doing ground-up development projects. So, I was always involved with Title, but I was never looking at it from the underwriter’s perspective. We left that to the attorneys that we used or the Title companies.
And I started my own law practice after my in-house position went away here in St. Pete about seven years ago, primarily focusing on commercial leasing, as you know. But last year, after finding a good paralegal, I decided I was going to do title work because people were telling me it’s a service you should offer and it’s easy. Well, it’s not as easy as people think.
But once I had a paralegal and with the training and the software, it’s in my bandwidth. And having seen that commercial for a long time, I thought, is this really an issue? Is this really something?
Eric
So the issue is this fraudulent title. That’s the issue, correct? Yeah.
Larry Silvestri
Yes, yeah, the way he explains it on TV, which is one of the scenarios, where the fraudster just goes in and kind of steals someone’s identity. A lot of times they do it with a quick claim deed, because with a quick claim deed, it only costs 70 cents to record, because on its face it doesn’t appear that there’s any value being transferred. So with a warranty deed, actually with either deed, if there’s value being transferred,
supposed to claim it and you pay transfer taxes on it. So, sometimes they’ll do warranty deeds and pay a small amount, but it’s cheaper for the fraudster to just put a quick claim deed, which essentially is a deed that says, I’m going to convey to you, party X, whatever interest I have in this property. Now, I don’t warrant that I have any interest.
Larry Silvestri
but I’m gonna give it to you. What often happens is that can be used in a circumstance where inter-family transfers are made, where they’re really for, as they say, love and affection, no real value, or if there is a question as to whether somebody like the wife of someone that transferred has not transferred her interest properly.
Eric
Sure.
Larry Silvestri
because she didn’t join in the deed and it was jointly held. So, quick claim deeds are good to clear up problems that you identify. They’re not really good to transfer title to a property, but it happens, I guess. I was skeptical, but it happens that based on this transfer of title, these fraudsters can borrow money. Or sometimes they just extort money from the owner.
Eric
So let’s just try to summarize. The fraudster steals person A’s identity. Quick claims the, let’s say, let’s say his name is John Smith. Quick claims John Smith’s property to himself, the fraudster. And then the fraudster files, he gets a quick claim, and then he takes that quick claim and gets a mortgage. Is that accurate?
Larry Silvestri
Apparently. Now, the question that I’ve always had, and I guess I’m just wrong in thinking that anybody lending money would do the proper due diligence to find this out. But I don’t know if the lenders are in cahoots that do this or what, but it does actually happen and become a problem that people have to actually litigate to clear their title.
Eric
Okay, so he’s getting a mortgage and-
Eric
Right, so now John Smith, who originally owned the property, still does own the property as far as he knows, tries to sell his property, tries to convey it legally to someone else, and then he hears for the first time that there’s a mortgage on the property. Is that generally what’s happening? Wow.
Larry Silvestri
That’s correct. He learns that he no longer, it appears on the record that he no longer owns it and someone has filed. On TV the guy says three mortgages by the time you find out and they show dramatically people getting these default bills, default invoices and everything. So that’s dramatic, but it really does happen. I actually have in my hand after the article published
woman reached out to me and said this is exactly what’s happening to us and Her husband had written a three-page explanation. More than three pages is two-sided of what happened to them. He’s also done research on others and this guy it drills down this
Larry Silvestri
the entity that apparently owns their house and the person that conveyed it to them are already in lawsuits in South Florida. And that.
Eric
Oh, it’s a shocker to me that this comes from South Florida. That never happens, never. Of course, you know I’m being sarcastic because it seems like every sort of, yeah, comes out of South Florida.
Larry Silvestri
Well fraud.
Larry Silvestri
Of course you are.
Well, the birth, yeah, you know, the Florida man story really should be South Florida man, but not Tampa Bay man or St. Pete man. But that’s, so I actually also had, when the article was posted, I had some people saying, oh, this really isn’t a problem. But it is a problem. It’s a problem often where vacant land is involved, where you have absentee owners.
And in fact, this is part of the title training that I received pointing out, you know, there’s wire fraud, you can talk about that if you want. There’s these other types of things, but this vacant land transfer fraud, it has become very popular in Florida. And I actually have had, I just started doing this last year and I’ve already had two cases where brokers have come to me, this is a little different spin.
This is the fraudulent buyer with purchase and sale agreements with a buyer who, in the first case, it was vacant land and he was going to put down $200,000. He actually jerked around everybody. And finally, because we want him to wire the funds, I get a check.
from a bank, BMO Harris, looks real, $200,000. Now, I’m already on red alert.
Larry Silvestri
So I go to my bank, I say, is this good? They said, well, we’ll just put it in the system and find out. By the time I get back to my office, I get an email from the buyer saying, I’ve changed my mind. I want to cancel this transaction. Wire me my funds back.
And of course, I’m, because I’ve just recently been trained and I’m not jaded, you know, and I’m on top of this. I know this is, you know, I don’t have good funds yet. So I email them back and say, when your check clears, I’ll send you a check.
And a few days passed, he even asked for it again. Because these people are very bold. And by that time I found out it bounced, and I just said, you know I’m not gonna send you money. And in some cases, my banker even said, don’t even bother reporting it to the feds. That’s a separate, that’s a separate thing. But these people do the same, you know, we’re, we, brokers.
Eric
Yeah, because, right.
Larry Silvestri
attorneys, title agents.
Larry Silvestri
are maybe the last best person to stop these frauds. And in one case, that’s kind of a wire fraud. I would have been the victim. Because if I had the funds in my account and wired them out, I would owe my trust account $200,000. Period. Yeah. So.
Eric
That’s good funds. The fed wire is good funds. Cashier’s check is not good fund. People think it is. It’s the same as a wire. It is not the same as a wire. So you know.
Larry Silvestri
It’s good fun. No.
Larry Silvestri
No, you got to let it clear and actually enter into. And frankly, as part of my title training, because I’m an escrow agent with those funds, it does get drilled into you that bad things can happen. If you don’t follow the rules very closely.
Eric
So.
Eric
So let’s get back to the fraudulent title. Is it possible that person to quit claim and then they try to sell it? Or is it only done with mortgages? OK, so they could try to sell it too. They got to quit claim. So you got to quit claim. Yeah.
Larry Silvestri
Yes.
Larry Silvestri
Yes. No, they sell as well. They sell it to an unknowing person.
Eric
So it’s not just mortgage. It can also be someone says, hey, I got a quick claim deed. And hey, let’s do a cash deal. I’ll give you a 10% discount if you do this in 10 days. And all you have to do is wire the funds. And that’s it. And we’ll give you your title.
Larry Silvestri
Right, and we don’t need a broker involved.
Larry Silvestri
We don’t need a title company involved. I’m giving you a lot of times it’s heavily discounted. And think about vacant land. The value of vacant land, until you know what you’re doing with it, is almost subjective. So if you looked on, if you did, I mean if you had a broker do an opinion of value, you’d be more in the ballpark. But if you just looked at the tax rolls, and the tax roll says,
For example, this property is being taxed as if it’s worth a million dollars. And somebody says, I’m going to give it to you 500 because I need the money right now. You know, of course, it’s not generating cash. But we got to do it quick. It happens. And I’m certainly not privy to all the reports of how these happen, but they do happen. And
Eric
Man, it’s scary. And I read that and I never thought about that. It was never my wildest dreams that you could quick claim a deed. We did either quick claims or deed and limit foreclosures when I was at the bank. But I don’t know what I was thinking. Been in this business for a long time, Larry. You know, what, 36, 37 years.
And when I saw that, it struck me because I was like, man, I always feel like this safe and secure environment inside of real estate in terms of conveyance of title in this state and really most of the United States. But it was like, wow, it kind of jolted me that title can be an issue and there can be fraudulent conveyance of that title. And it’s just something I hadn’t come across before. So we had all kinds of sticky issues.
Mortgages and things. Yeah.
Larry Silvestri
So you drill down, you drill down and you think, where’s the flaw? If you’re selling a car, you have a title, title transfers, the states involved. And I don’t know any particular scheme, fraud scheme in cars, but in property.
the county clerk is required to take those deeds if on their face they connect all the dots. So the county clerk isn’t really in a position to cross check things, certainly can’t do a signature analysis to see if anything’s not right with the last deed. So right now, until something changes.
I had people comment on Line that, well, the county clerk should be able to control this. They should be able to, well, we don’t have a real good mechanism. And they don’t have the staff to do that. The current legislative, you know, the role is take it, see if it’s properly acknowledged, see if it has, you know, the right minimum words, which are pretty minimum in a quick claim deed.
Eric
How can he? Yeah.
Larry Silvestri
and to collect the fee required to record it. So now, as you saw in my article, to me this became kind of a pet peeve because of the TV thing. And I’m thinking, why are people paying money for this? Well, now that I know what happens, and particularly affects vacant land and the elderly. Because absentee owners and the elderly can be targets.
It turns out in Florida, we do have programs at the county level for you to be notified If anything happens to your title if there’s something recorded that appears to file A lien or transfer or any of that, but you have to sign up for
It’s not, and again, partly because the court clerks have limited resources and don’t have the systems to like just send out a notice to anybody. But it’s, we’re encouraging people to sign up so that they will get that notification. And there’s also some legislation that’s being worked through.
Eric
proposed.
Larry Silvestri
that would do a test case where there’d be some requirements that brokers and title companies and probably attorneys as well who are involved in these processes would give the clerk a heads up.
Larry Silvestri
because it’s hard to unring the bell. The sooner you get to a fraudulent deed problem, and that’s why the notification can really help, you still have an issue. We haven’t quite figured out how to prevent it. And so many fraud schemes are out there. They’re always one step ahead as to how they do the fraud. But we at least are looking at how to make it easier.
to address, to unring that bell, and have the property title corrected.
Eric
Okay. Larry, this is like, when you sent this to me, I really was appreciative. It was kind of a slap in the face for me. It was a wake up call. I hadn’t really thought about these things previously. And so, I appreciated you sending that to me and I thought it would be a good idea for us to do a quick recording on this. Before I get you off the phone, why don’t you do a little plug in terms of how people can get in touch with you and what kind of business that you…
What do you seek to do? What do your clients do? And all that sort of thing.
Larry Silvestri
Okay, so as I kind of said in the beginning for most of my career I was in house counsel with development companies mostly doing shopping centers So a large part of what I do is in that retail arena. I do a lot of commercial leases So part of my marketing is I’m Larry the leasing lawyer .com And that will take you to my website, Silvestri Law, P.A. My phone number is (727) 456- 0017 and where I bring value
to my clients is in the transactional arena. I don’t do disputes. I don’t go to court ever. I sometimes handle landlord-tenant disputes where it’s a learning process of a negotiation, but not if it looks like it’s going to be litigation. And I do title work. So I actually now…
Eric
Okay.
Eric
And title work with residential or commercial, you would do either on the title work, correct? OK.
Larry Silvestri
Correct, residential or commercial.
Eric
OK, awesome. Larry, again, appreciate you taking the time to explain this a little bit more to us. I think it was worth having the conversation because I think that our clients would want to know that. I think we kind of need to get the word out. Always just be vigilant. I think that’s the lesson and the story here is just if it walks like a duck, talks like a duck, it’s probably a duck. And just things aren’t flowing right with a potential buyer or things aren’t flowing right. You know, you.
sign up. I think you talked about there’s a sign up perhaps for people to be notified. Yeah. So those are the kind of ways you can protect yourself because no one wants to be stuck in that situation where somebody quit claimed your property, they mortgaged on it, and now you’re trying to unravel that and get clear title so that you’re actually capable of selling it. It could be a total nightmare.
Larry Silvestri
Every county has something.
Eric
Really, probably even worse than what you hear on stealing identities and people taking the credit cards. A lot larger numbers here potentially involved. So.
Larry Silvestri
I’ve had my identity stolen, we could do that at another time. And I also want to emphasize that while it appears that vacant land and homes with the elderly are particularly vulnerable, a lot of commercial property of course is absentee owners, you’ve got management companies, but it’s also vulnerable and probably attractive to these fraudsters.
Eric
Okay.
Eric
Sure.
Eric
Well, Larry, again, appreciate your time, my friend, and we’ll chat later.
Larry Silvestri
All right, well, thank you for the time.
