Why isn’t 2nd authentication used? ....like contacting the existing owners.
Probably because it hasn’t become a big enough problem yet for the banks to institute this reqirement.
Just remember the first step in the fraud is identity theft and forging of documents to transfer the deed at the records office, creating the appearance of a clean deed for the bank to rely on when they checked for encumbrances before they made the loan.
It’s not where you expect to find fraud.