While it is not a common occurrence, it can and does happen: deed fraud. What is it? Deed fraud occurs when the title for a particular piece of property is transferred and recorded through fraudulent documents without the knowledge or consent of the rightful owner. The fraudsters would need either false identification that wouldn’t be detected by the review of a notary public or an imitation of a notary stamp.
The properties that are most vulnerable to deed fraud are homes that are not transferred immediately after a death or ones that are left vacant for long periods of time. In fact, there are anecdotes of homeowners returning after a long trip abroad to find unknown persons occupying their home. What a shock that would be!
Why would someone go to such great lengths and engage in criminal activity to forge documents and transfer property? In all likelihood, the thief is not planning to inhabit their ill-gotten gains. Instead, they are after a payday – either by turning around and selling it to honest, unsuspecting homebuyers or to draw off the equity through a mortgage lender.
Because the process to buy a home, especially for a first-time buyer, can seem daunting, with so many documents to sign and proof of identity to show, it may seem impossible that someone could successfully navigate that gauntlet without actually being who they say they are. A closer look at the strategy, complex as it is, can give you an idea of how to protect yourself and your home from deed fraud.
The first thing that an unscrupulous party would need in their attempt to steal property in this manner would be a legal description of the property. Due to the prevalence of electronic records, this can be easily obtained through online land records in most municipalities and then used to create the fraudulent deed.
A likely next step would be to source a copy of the signature of the legitimate owner who currently holds the deed and title so that new ones can be forged. Like the property records, these signed legal documents can also be located through public records. Armed with false identification or a phony notary stamp, the thief can then create a deed that transfers the property from the grantor – or owner – that they are impersonating to themselves, an alias, or to a shell business. Once the fraudulent deed is recorded, an unsuspecting homeowner has technically lost their property without even knowing it.
Steps to Prevent Deed Fraud
It sounds like a legal nightmare, doesn’t it? Luckily, there are steps that property owners can take to prevent deed fraud in the first place. If you own a piece of property that is unoccupied, be sure to pay it a visit regularly to be sure everything is in order and that there are no signs of unwelcome guests. Alternately, you can instill security cameras that can be accessed and viewed remotely or, if you live a long distance away, it might be worth hiring a property manager to make those check-in visits for you.
The other vulnerable types of properties are those that are not legally transferred to an heir after the passing of the owner. This can be prevented by working with an estate attorney. The property could be transferred into a living trust with a named beneficiary who will inherit the property upon the owner’s death. If this is the case, the paperwork should be handled with all due haste so there’s no time for the situation to be taken advantage of. Another option would be to update a deed to one of joint tenancy with rights of survivorship.
For homebuyers, it’s a good idea to perform your own due diligence with a search of the public records for the property under consideration. If there are recent changes to the deed or title, particularly a quitclaim deed, further investigation may be warranted.
The ultimate reassurance for homeowners will come from title insurance, which is routinely required by lenders before a mortgage will be approved. Title insurance is a policy that protects a buyer against any potential defects in the title, such as forged documents, fraud, or liens against the property. It is the title insurance company’s responsibility to alert the buyer to any hindrances that would prevent a clean new title. It is also their responsibility to pay for any damages if they miss information that is consequential to the sale.
What to Do If You’re a Victim of Deed Fraud
While the crime is extremely rare, it can be a difficult one to resolve. The first step would be to contact local law enforcement for assistance and guidance. One would also want to make a call the county office that records deeds and property records to advise them of the fraud so they can be on the lookout for any further forgeries or false documents. If you are a new homebuyer and discover the fraud, you will also want to call the title insurance company as they may have missed critical information in the original title search.
In any event, you will probably want to consult with your own attorney, one who specializes in real estate law, who can guide you through each step in reversing the damages caused by the deed fraud.
Don’t Get Caught Unaware
The best offense in this case is a good defense. Defend and protect your biggest investment by trusting the experts at QuickDeeds.com for title insurance on new real estate purchases. Attorney services are provided by Easler Law, who will handle your needs in record speed at a reasonable cost while paying close attention to the details so nothing gets missed. You’ll be able to buy with confidence when you leave the deeds and title insurance to us!