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Fraudulent deed transfers: something to think about!

I spent the day fine tuning my talking points for a presentation that I'm giving in Tuscon next week. For the first time, I've decided to include fraudulent deed transfers to the ever growing categories of real estate fraud that I discuss with audiences.

The decision was based on information gathered from three different sources that I encountered this past week.

First, I received an e-mail from Dave Wirsching containing a link to a Philadelphia Daily News article portraying title theft as a minor epidemic in the City of Brotherly Love.

An alarming "122 stolen properties" were reported in Philly in 2006 and it's believed that many cases go unreported. Local authorities are concerned about having adequate staffing to handle the investigations and convictions.

Then, I noticed that Rachel Dollar touched upon the topic while testifying before a Senate Committee on behalf of the Mortgage Bankers Association.

Finally, my research uncovered an online service launched by McHenry County, Illinois to alert homeowners if documents containing their names are submitted to county clerks for recordation. Subscriptions are available for $12.99 for one year or $29.99 for three years.

The elderly are particularly vulnerable to this heinous form of fraud when their homes sit vacant. Using quitclaim deeds and forged signatures, fraudsters transfer title to properties into another name. The stolen properties are then quickly resold (flipped) or mortgaged to strip the rightful owner of any equity.

It's interesting to note that a number of accused offenders in Philadelphia were stupid enough to use their own names.

Fraudulent deed transfers are something to think about if you have elderly parents or loved ones whose homes are sitting vacant for any reason. You might consider asking your title company to periodically verify title or do it yourself using online records.

All in all, it's a frightening and sophisticated type of criminal activity that's best prevented by legislation that promises tough prosecution and lengthy prison sentences for offenders and accomplices. Think about it: a notary has to be part of the scheme.

Posted by Ed Rybczynski on 02/23/2008 05:32 PM

Comments (23)

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23 Comments on Fraudulent deed transfers: something to think about!

FEB

2008

Is this really new? Or, it just now being noticed because of other mortgage fraud schemes?

I want to see some perp walks on TV.

Lenn

I had heard about it in the past at title underwriting seminars, but that's about it. Automation is making this type of fraud remarkably simple. After identifying vacant properties, fraudsters can use online records to obtain everything else that they need to steal title to properties.

Ed... to answer Lenn's question, this has been going on for years. But it's finally being talked about on TV. Just last year, 80 minutes did a segment on this. And this topic was even in a most recent Law and Order episode. We need more people, as yourself, to write about this. We need the public to pay attention to these schemes.

Hi Jeff

Thanks for the info.

Ed,

This sounds like 'the unknown owner' scheme that occurred years ago throughout Pennsylvania...I won't detail it for fear of giving scoundrels any ideas!!! Thanks, Fran

Fran

Thanks for the insight. I'll ask for details the next time we speak on the phone.

Ed: Well, it's the first time I've ever heard of this and thank you for the warning. I've been meaning to ask someone regarding Title. I have a client who bought a home and the builder didn't pay for the hardwoods. The builder went bankrupt. The hardwood company put a mechanic's lien on the property to the tune of $7,400. Does Title Insurance cover this... I told her that I didn't think so since it was after she bought the property. What kind of recourse does she have, if any. I have her home listed and we just now found out about it.

Jan

Mechanic's lien statutes vary wildly from state to state. Last fall, I sat in on an underwriting seminar in Knoxville that covered similar issues and feel that your client might well have a legitimate title claim.

I would talk to a local title person before contacting the title insurer that issued the policy.

Ed: Thanks, we'll take that route first.

I had a situation where the deed transfer was very interesting...Unfortunately the part owner of the home was locked in a state mental institution so whether or not it was legit...who knows. Everything was notarized, so I agree you would have to find a notary to go in on it.

Great post, Ed. I haven't heard of this happening locally yet, but I'm sure it's only a matter of time before someone tries it. Title Monitoring could be a good business opportunity.

Thanks, Ed. We have so many out of state homeowners here, vacation and 2nd homes. They may come only once a year - danger?

FEB

2008

I am sure there are more of these out there than many folks realize. The elderly are a prime target for con artists, whether acting openly or quietly hidden. I believe we need much stricter penalties.

What a shame that our elderly population has another issue to be concerned with. Enjoyed your post.

Ed,

I wonder how bad the study is here in FL. I deal with many seniors right now...so I wouldn't be surprised if it is wide spread here as well.

Ed..I hadn't heard of this either! But what a fertile playing field they find themselves in now!

Hello All

I was absolutely shocked when hearing of a real estate crime that primarily targets the elderly. Title theft is sometimes mentioned at title seminars, but the fact that it has become pervasive is very surprising to me. I guess I'm overly optimistic about a collective conscience and can't imagine anyone preying upon the vulnerable.

Automated land records are definitely a contributing factor to the apparently expanding crime wave. Fraudsters can conduct ownership research and gather information needed to prepare fraudulent deeds from the comfort of their homes.

Thanks for commenting.

Wow, I think there is a special place hell for people who prey on the elderly. Man, you are messing with people's life when you mess with their home.

MAR

2008

In York, PA we have an association. The developers of the property created the association, by-laws and covenants. Contained within the covenants was stated that when 24 homes were sold, the association would be responsible for maintaining the "perpetual open spaces". I am the 4th president of the association and have lived here two years. In reviewing our secretaries handbook in late DEcember I came across a deed transfer to the association. The developers had three partners. One of the partners is a lawyer who created the deed indicating he was acting as "agent for the association". His wife was the notary. The current and original association members did not give the lawyer permission to act as an agent, nor was anyone aware this deed transfer took place - till I stuck my nose in. We want to disband the association acording to the rules of the covenants. Because this deed was concealed, I will be calling a lawyer 3/24/08 after input is received from all association members. Should I be talking to our D.A.? Our township requires we keep all grass mowed to 12". To do so will cost up to $10k per yr. The land cannot be developed and must remain open space acording to the township. I believe this is why the deed transfer was conceiled. Also should my "title insurance co.", realtor, previous owner (who had no knowledge) or closing lawyer or someone - should I have been informed? What is our recourse?

William

Have the 24 homes mentioned in the original covenant been sold?

Who has been paying the lawn maintenance fees to date?

Who do you foresee paying the lawn maintenance fees if the association is dissolved?

OCT

2008

Well everything here is interesting. The only thing is, try and report it!

We had a property we owned transfered with a forged signature,(documented by 2 independent and seperate forensic document examiners), without a valid contract, and without our consent, in other words stolen. it was done by a large brand name title company. It has cost us over $10 in legal fees and we have no chance of recovering the missing funds nor our legal expenses. According to the judge a title company isn't a professional service so they can't be sued for professional malpractice, hence no legel costs.

We called the local police, they didn't care. we called the county sheriff, they didn't care. We called the FBI, they didn't care. We called the state banking and insurance commission, they said they had a slight problem with the signature but everything else was ok, they were even ok with the papers without a signature but with the missing signature witnessed by 2 people. We even called the governor, he didn't care either.

If no one cares about fraud and forgery, no wonder we are in this financial mess. i thought title companies were supposed to be the last line of defense against fraud, but if they are openly engaging in it, well i guess it just makes us worse than most 3rd world counties, at least there someone will do something.

FEB

My exhusband forged my signature on our home title deed in 1993 and transferred our property in his name. He sold the property in 2002. I have hired a lawyer to claim my half of the property. The new owner has Title Insurance and has filed a claim. To what extend will the Title Company resolve this matter? How will they help me to prove my case? Will they bring criminal charges against my husband. I might have to prove my case by bringing in a handwriting expert. I am an innocent victim and like others this matter is costing me money out of my pocket to resolve. People don't realize that one dishonest action by one causes hardship for many people that are involved. Congress has to come up with a law to impose strict punishment to these offenders. Forgery is a scary matter and with the economy the way it is, fraudalent acts are going to increase.

I failed to mention my legal name had changed. The notary failed to ask for ID or he was in on the scheme. I feel I have a strong case, but I have to go the extra yard to prove forgery of my signature. I could not obtain the original deed with my signature on it. Any advice or suggestions would be helpful. Meanwile I will continue to do my research. Oh, my the way, I live in Virginia.

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