Title to real estate is usually in the form of the deed you signed when buying the property, which was then recorded at the county office. Assuming those virtual records do not disappear or get “wiped”, after recording, the hardcopy, original deed is virtually worthless. Copies also exist at the settlement agent’s office (attorney, title, escrow) that performed your closing. Keep it, nonetheless, safe. The point is that a property’s title cannot be stolen. Your property can, however, be USED to commit financial fraud against lenders, buyers, and tenants. This will cause you inconvenience and expense to fix.
The primary method of property fraud is the impersonation of landowners to
A) Sell the property & keep the proceeds, or to
B) Borrow money against your property and then disappear with the loan proceeds, or
C) Lease it to others for some down payment or security deposit, to receive recurring lease payments until the scam is detected and stopped.
The selling or borrowing schemes are hard, but doable. Each would normally take some weeks to accomplish under legitimate circumstances, but it is certainly possible for bad actors to carry these out in a matter of days, if they had their act together.
A) Sales scheme – This could take place if the buyer was willing to purchase sight unseen, quickly, if convinced they were getting a good deal, and if they did not perform any due diligence to check on the validity of the sellers and availability of the property, and other details. The buyer and the lender are scammed out of their funds, and the property owner has to pursue legal action to evict the duped buyer. If a home is stolen, and if the bad actors stole all the personal belongings, then this adds financial loss and inconvenience to the legitimate owner.
B) Borrowing scheme – A real estate loan typically involves an appraisal, which requires entry into a home, but could be done as a “drive-by” appraisal with no entry. If it is the vacant land, then this is not a problem for the fraudster. Fake IDs, income & financial documents would be required – from your stolen personal information. This could be done while you are living in the home without you being aware. The bank (lender) is the duped party here.
The property owner may have to take legal action to prove it is innocent, and to cure their credit of any late payments the lender may have reported. Email, phone, and mail from the lender will be diverted to another address, so you may not get any notice until someone shows up to try to change the locks on your door from the county, in preparation for the sale of your house at the courthouse steps.
C) Lease scheme – if you are out of town or country, your home could be leased fraudulently. If the property is not owner-occupied, such as vacant land, farm land, an office building, a floor, or a suite, this could be executed without you being aware. Monitoring of the property, and/or regular inspection or visitation, are typically the best forms of prevention for this fraudulent scheme. The tenant is duped of their funds, and the property-owner must likely pursue eviction costs and time periods.
Home Fraud Protection – Role of a title search in preventing property fraud
A) Purchase Scheme
- Call the county recorder’s office, inform them of the suspected crime, and see if they will pull up the most recent deed for you. If it’s not yours, report it and:
Order a title search back to the date YOU purchased the property. This will list any/all recorded deeds, mortgages, and liens found, along with copies of all the documents found of record during the search period. If any are not yours, then take immediate action to report the crime.
- If no crime is suspected, but you want to check, go to the recorder’s office and ask them where to look for your deed. It should list you as the property owner.
Also, double check that the tax office lists your name as the owner of your property – the tax office gets its info from the recorder’s office periodically, after new deeds are recorded, weeks or even months later. Some tax info lags behind the recorder’s office by as much as 12 months. Therefore, also ask if there is any such lag.
B) Borrowing Scheme – To look for mortgages from fake loans – Order a Current Owner title search as discussed above – this will go back to the date you purchased the property. If any are not yours, then take immediate action to report the crime.
C) Lease Scheme – Fraudulent leases will not be recorded, so a title search will not reveal anything. Therefore, monitoring of the property, and/or regular inspection or visitation, are the best forms of prevention for this fraudulent scheme.
