Bulletin: NY000001

Dear Associates:

Forgery claims, once exposed, appear to be consistent in their nature of discovery; it is easy to be a "Monday Night Quarterback". Accordingly, I would bring to your attention a recent example of a discoverable forgery.

A review of the facts indicate that the record owner of the subject property obtained a release of lien of an existing mortgage which was less than three months of record. Subsequently, a new mortgage was placed of record and within a few months a release of the subsequent mortgage was recorded. This process of obtaining new mortgages and releases prior to any subsequent mortgages continued for quite some time until there were six liens of record within five releases having an aggregate indebtedness in excess of $800,000. The subject wrongdoing party attempted to keep all mortgage payments current but eventually could not maintain the cash flow required. In all instances different lenders, title companies and closers were used and all documents appeared to be accurate and complete including, but not limited to, the appropriate forms, seals, signatures and acknowledgments.

An alert examiner might question that mortgages were satisfied immediately prior to new indebtedness for which the subject property was security. Customarily, it is the proceeds of refinancing which would satisfy the then existing debt so as to have satisfactions of mortgages dated on or after the refinance.

Based upon the above and foregoing, please alert those parties who review chains of title and examine title documents to bring to the attention of appropriate parties in your organization situations which appear suspicious or unusual, with particular reference to the satisfaction of mortgages. Do not hesitate, where you deem it appropriate, to contact a lender to confirm that the release of record is in fact valid. In the event that we can be of some assistance in this regard, please do not hesitate to contact us at your earliest convenience.