FRAUD - LOSING YOUR HOME - IDENTITY THEFT

By
Real Estate Attorney with THE ZARETSKY LAW GROUP - Board Certified Real Estate Atty and AUTOMATED LAND TITLE COMPANY

It is a day past Halloween, but here is a scary TRUE story:

My office is presently working on a case that is so prevalent that I thought posting it on my blog would be helpful.  The matter involves a single person who bought a home 5 years ago. 

It is a nice house, in a great community.  He bought is for investment, paying about $400,000 and getting an 80% mortgage.  It is his second home in South Florida, and his other home is about 5 miles away, but that is seldom used as he works in another state.

He put a renter into the house, using an established Realtor for find her.  The renter paid her rent regularly without any problem every month.  About one year into the lease, the homeowner paid off the mortgage with extra cash he earned.  He also extended the lease for the renter, using the Realtor for the paperwork.

The renter apparently had a friend with whom (we would later learn) lived in a previous house with her.  Shortly after the extension to the lease was executed, the renter created a quit claim deed from the owner to herself, and recorded it for nominal consideration.  About 3 months later she sold the house to her friend for $500,000.  Her friend took out a conventional mortgage for 80% and the renter took back a purchase money mortgage in 2nd position, which covered most of the remaining cash to close.

The owner was alerted to the deeds when his Realtor called him because she was just updating her files and checked online for his real estate taxes - seeing the tax collector was showing the wrong owner for the property.  She went to the property and it was vacant. 

No mortgage payments were ever made on the home by the "new" purchaser.

After more than two years of litigation, the Quiet Title case is going to court.  The real owner has not had title to the home and missed the ability to sell it in the right market.  Plus he has the legal expenses associated with the recovery of title of the house. Fortunately the title underwriter paid off the fraudulently acquired mortgage, so we only have to get rid of the 2nd mortgage and the fraudulent deed and the deed subsequent to it.

The perpetrators are no where to be found.

Of course a glaring question is the notary on the Quit Claim Deed - we are gathering evidence that should put that person out of business - or at least authenticate the claim on the insurance bond (which is limited to a nominal amount).  This is a primary example for notary publics to keep a log of what they notarize along with copies of identification of the signing parties for every transaction.  It is a HUGE pain, but is there a better way?

I don't know the moral of this story.  I guess it is .... IT CAN HAPPEN TO YOU (or your clients)!

If anyone has a similar story to relate - please share it!

Richard Zaretsky, Esq., RICHARD P. ZARETSKY P.A. ATTORNEYS AT LAW, 1655 PALM BEACH LAKES BLVD, SUITE 900, WEST PALM BEACH, FLORIDA 33401, PHONE 561 689 6660  RPZ99@FLORIDA-COUNSEL.COM - FLORIDA BAR BOARD CERTIFIED IN REAL ESTATE LAW

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identity theft
mortgage fraud
mortgage
fraud
lawsuit
title insurance
attorney
notary
quit claim deed
criminal
fraudulent deed

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Richard Zaretsky

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