Oct 1, 2026 · 47 min · 11 segments
In this episode of the Midnight Founders Podcast, we sit down with Scott Chapman from The REAL Difference Project to hear his story, the mission behind his work, and what it takes to build something…
Is it happening to people that own their properties outright? They probably don't have liens.
We thought that originally when we came up with this concept of real property vault, we thought this is going to protect paid off properties, right? And then we started talking to county recorders.
And for example, in Washington County, which is where we're based out of, we talked to our county recorder there.
He said the majority, about 60% of the fraud they actually see is against primary residences that already have a mortgage in place, but they're high enough equity that it's an easy enough target.
How do they get that far down the road though? In that case, they're probably not trying to sell the property.
What they're going to do more often, this is the second type of fraud that can occur, is just straight deed fraud.
If a deed comes into the county recorder's office and it meets their checklist of formatting guidelines, it must be recorded.
So what a fraudster will do in that case is they'll just file a deed against the property, put their name at the top of title, and then they'll go...
And there's some ways they can be real sneaky about it, right? They can form, say, form an LLC with the owner's name in it or form an LLC with no name in it, but with a property address in it, right? There's some things they can do that it would look okay even to like a preliminary title search, right? But so they'll put their name at the top of title.
Sometimes a $10,000 payday is pretty great for a fraudster, right? Like that's still a good payday.
And so we learned the majority of fraud is against properties that are already encumbered.
Um, they just have to have enough equity for someone to take out a HELOC or a second or a third or a fourth because they've already got all the personal information they need and they can relatively easily go and just file a deed to tweak that title however they need to.
But that only works if, um, the, uh, you know, the, the lien holder doesn't really know their client, right.
If they knew their client and they had them come in and sign documents and stuff that would help prevent, you know, that issue.
Are you talking like a first position mortgage? They wouldn't go to the same lender.
They'll go find a reverse mortgage company and bring all the information they need and make it look good enough.
Granted, there's a lot of good people in the industry who aren't going to fall for this stuff.
Is it happening to people that own their properties outright? They probably don't have liens.
We thought that originally when we came up with this concept of real property vault, we thought this is going to protect paid off properties, right? And then we started talking to county recorders.
And for example, in Washington County, which is where we're based out of, we talked to our county recorder there.
He said the majority, about 60% of the fraud they actually see is against primary residences that already have a mortgage in place, but they're high enough equity that it's an easy enough target.
How do they get that far down the road though? In that case, they're probably not trying to sell the property.
What they're going to do more often, this is the second type of fraud that can occur, is just straight deed fraud.
If a deed comes into the county recorder's office and it meets their checklist of formatting guidelines, it must be recorded.
So what a fraudster will do in that case is they'll just file a deed against the property, put their name at the top of title, and then they'll go...
And there's some ways they can be real sneaky about it, right? They can form, say, form an LLC with the owner's name in it or form an LLC with no name in it, but with a property address in it, right? There's some things they can do that it would look okay even to like a preliminary title search, right? But so they'll put their name at the top of title.
Sometimes a $10,000 payday is pretty great for a fraudster, right? Like that's still a good payday.
And so we learned the majority of fraud is against properties that are already encumbered.
Um, they just have to have enough equity for someone to take out a HELOC or a second or a third or a fourth because they've already got all the personal information they need and they can relatively easily go and just file a deed to tweak that title however they need to.
But that only works if, um, the, uh, you know, the, the lien holder doesn't really know their client, right.
If they knew their client and they had them come in and sign documents and stuff that would help prevent, you know, that issue.
Are you talking like a first position mortgage? They wouldn't go to the same lender.
They'll go find a reverse mortgage company and bring all the information they need and make it look good enough.
Granted, there's a lot of good people in the industry who aren't going to fall for this stuff.
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