If They Can Steal Your Identity, Steal Your Car, and Steal Your Money, Can Someone Steal Your House?

By
Real Estate Agent with RE/Max Associates DE#RA-0003085 PA#RS347136

During a night where it was tough to fall asleep, I caught an infomercial about title fraud. Wondering how easy it was to steal someone's title (and having heard about people actually doing this), I turned to my friend, Barbara Brodoway, a real estate attorney here in Delaware. I asked Barbara to put together information on this subject and the result is this article below. Hope you find it helpful!

Deed fraud, also called title fraud, is getting a lot of publicity lately.  Deed fraud happens when a person records a deed that appears to be valid, but it is not.  Sometimes, the owner’s signature on the deed is forged, or the deed may be signed by a Trust or entity that looks like it has ownership of the property but does not.  The purpose of the fraudulent deed is to create the appearance that a fraudster owns a property.  The true owner is usually not aware of the fraudulent deed. 

 

Here is one way it works.  The fraudulent deed is recorded at the Recorder of Deeds office and it then appears as if the fraudster really owns the property.  Next, the fraudster advertises and sells the property to an innocent buyer.  This works best with vacant properties or where the property is sold to a buyer “sight unseen.”  The buyer is often enticed with a low price for a quick cash deal.  Eventually, the true owner discovers the fraud.  Then, the dispute regarding ownership is between the true owner and the innocent buyer – the fraudster is gone with the buyer’s money. Although the true owner has superior title over the “duped” buyer, the owner must clear their title on their own or title is not marketable because the forged deed of the fraudster was post-settlement.  Buyers rarely just sign a deed over without trying to contest ownership, and any lawsuit is expensive.  

 

How can you prevent it from happening to you?

 

First, a homeowner must pay attention to their property.  This is easy if it is your residence, but if it is a vacant property, the homeowner must establish surveillance and secure the property.  However, even this is sometimes not enough.  There are buyers who are so anxious to buy property that they do so sight unseen.  They rely on photos on the internet of what they are buying.  It is easy for fraudsters to copy photos from legitimate real estate websites and create a false listing.  Buyers need to be especially vigilant and go through established Realtors® to investigate.  When in doubt, you can also consult a real estate attorney. Often, buyers are dazzled with a property and price that looks too good to be true.  They succumb to the pressure to act now before someone else gets the deal.  When buyers buy a property sight unseen, the fraud can happen even with owner-occupied properties.

 

If sounds too good to be true, it probably is.

 

What can homeowners do to protect themselves?  Homeowners have two good ways to help defend themselves against deed fraud.  First, every buyer should get Enhanced Owners Title Insurance when they purchase real estate. Homebuyers can get a standard title insurance policy or, for slightly more, an enhanced policy.  One of the many benefits to an enhanced title insurance policy is that it includes post-policy deed fraud in its coverage.  This means that if a homeowner is a victim of certain kinds of deed fraud, they can submit a title insurance claim to the title insurance underwriter to provide coverage for the claim.  

 

A second defense is to see if an “Alert Me” program is offered by the Recorder of Deeds office.  If so, a homeowner signs up to be alerted by email if any document is recorded bearing the owner’s name.  In the event of a fraudulent deed, the true owner would be alerted and can take immediate legal action.  So far in Delaware, only the New Castle County Recorder of Deeds has set up an “Alert Me’ program.  It can be accessed here: https://www.newcastlede.gov/147/Identity-Protection

 

Unpublished work©2022 Barbara A. Brodoway, Esquire. All rights reserved. 

 

Note: The material provided herein is for educational purposes only and does not constitute legal or tax advice by the author.   No express or implied warranties.

 

Comments (9)

Jeff Masich-Scottsdale AZ Associate Broker,MBA,GRI
HomeSmart Real Estate - Scottsdale, AZ
Arizona Homes and Land Group/ Buy or Sell

The contents of the house and the deed itself can be stolen....a scary thought.

Jul 25, 2022 10:16 PM
Monica Hill

It is scary. I'm not sure how Title Insurance is handled in other areas of the country. I'm told it's easier for title theft to occur in some states as opposed to others. 

Jul 25, 2022 10:18 PM
Laura Cerrano
Feng Shui Manhattan Long Island - Locust Valley, NY
Certified Feng Shui Expert, Speaker & Researcher

I really think there’s a lot of good momentum happening despite what the market says I think there’s a lot to be optimistic about regardless

Jul 25, 2022 11:23 PM
Monica Hill

Laura, I think you meant to leave this comment on another post?

Jul 27, 2022 08:31 AM
Richard Weeks
Dallas, TX
REALTOR®, Broker

Great information, thanks for sharing.  I hope you have a great day.

Jul 26, 2022 03:24 AM
Monica Hill

Thanks, Richard, and thanks!

Jul 27, 2022 08:31 AM
Wayne Martin
Wayne M Martin - Chicago, IL
Real Estate Broker - Retired

Good morning Monica. Valuable information. Was not aware of the availability of enhanced title insurance. Will check it out! Enjoy your day.

Jul 26, 2022 04:46 AM
Monica Hill

Thanks, Wayne! I know real estate is handled differently in different states and that's it's easier to gain fraudulent access to title in some places as opposed to others.  

Jul 27, 2022 08:33 AM
Nina Hollander, Broker
Coldwell Banker Realty - Charlotte, NC
Your Greater Charlotte Realtor

Excellent advice, Monica... I've been recommending enhanced title insurance policies to my clients for years. It's a small price to pay for peace of mind.

Jul 26, 2022 04:54 AM
Monica Hill

After discovering this additional information, it's stepped up my recommendation for an enhanced title policy, too!

Jul 27, 2022 08:34 AM
Nina Hollander, Broker
Coldwell Banker Realty - Charlotte, NC
Your Greater Charlotte Realtor

Kathy Streib hi Kathy... this is a perfect post for one of your AHA moment posts!

Jul 26, 2022 04:54 AM
Monica Hill

Thanks, Nina!

Jul 27, 2022 08:34 AM
Michael Jacobs
Pasadena, CA
Los Angeles Pasadena 818.516.4393

Hello Monica - scams of all kinds are "out there".  Hopefully maintaining awareness of what is happening is also a constant companion.  

Jul 26, 2022 05:03 AM
Monica Hill

Thanks, Michael. That's part of why I enjoy Active Rain is that I learn here from other professionals. Just trying to help out my fellow professionals and in turn, all of our clients. 

Jul 27, 2022 08:35 AM
Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

Monica, I have had many contact me asking if they need title protection.

Jul 26, 2022 06:43 AM
Monica Hill

Joan, feel free to share what I posted. 

Jul 27, 2022 08:36 AM
Ed Silva
Mapleridge Realty, CT 203-206-0754 - Waterbury, CT
Central CT Real Estate Broker Serving all equally

This is a new to me, but I can see how it would be easy to do with a vacant property especially with an absent owner

Jul 28, 2022 06:37 AM
Monica Hill

My concern is for our clients who might see a similar infomercial and respond out of fear instead of doing some homework to get the facts. It does seem that it would be easier to accomplish with an absent owner, but you never know.

Jul 28, 2022 09:23 AM