Blog > Deed Fraud - Don't Let it Happen to You
I don’t know about you, but I feel like every time I turn on the radio nowadays, one of the hosts is sponsoring one of the many companies specializing in title or deed fraud. A couple of these advertisements go on to mention quitclaim deeds. These ads got me wondering about how prevalent this type of fraud is and how quitclaim deeds are used to enact it. On top of that, is it actually worth your money to pay one of these companies, or are they like the many credit fix companies that we are all so leery about?
In the age of Covid, I think we can all understand why cybercrime is climbing and will probably continue to at a faster rate than we’ve seen before. This means we all have to be even more careful with our private information. We often think of protecting things like our credit cards and account numbers, but when it comes to a home, we only think of physically locking it up to protect what’s inside. What we need to think about is protecting the value it carries. So, where does a home’s value lie? One of two places, either as a place to live or a product to leverage.
The kind of homes that are “stolen” as a place to live are places that are vacant at some point like investment properties and second homes or empty due to things such as the owner's death or relocation due to age. If you are responsible for an unoccupied home, it’s important that you not only lock it up but also visit the property regularly to make sure no one has moved in. If you live in another state and can’t make regular visits, ask the neighbors to keep an eye out for activity. Technology has made it easier than ever before to keep an eye on a property from a distance with things like motion sensors and video doorbells. Many of these can now be programmed to send you alerts when the motion sensors go off, and in my opinion, the cost is minimal compared to the value of your home. Squatters, people who occupy a property without the owner's permission are actually more prevalent than you might think and they actually have rights. If someone does take up residence in a home you own without your permission it would take some effort and a lot of time for them to gain legal ownership of your property, however, it could still cost you not only time but a significant amount of money in legal fees to remove them not to mention property damage costs.
A house as leverage can be used in many ways, and when stolen, can be monetarily devastating to an owner. This is where deed fraud comes into play and possibly quitclaims. There is a wide range of ways to leverage the value in a home, from getting loans based on equity to actually selling the property. All of these hinge upon having a deed to the property, therefore, falsifying documents and forgery are almost always involved. The main thing for you to understand is that these are possibilities, so take the steps necessary to protect yourself.
What do you need to know?
What you need to know is that criminals can steal the deed for your home and in doing so can cost you a large amount of money. Criminals tend to target unoccupied homes so vacation or second homes, rentals, and homes that remain vacant after an owner has moved are more at risk than occupied homes. It used to be that someone who had no place to live just happened to find a vacant home and moved on in, they were just looking for a roof over their head. Certainly, this still happens; however, today we also have criminals targeting your home to make money off of it.
How does this happen?
What happens is criminals are not only driving around looking for vacant properties, but they are also searching online. The historic way of finding these properties is driving around and looking for signs that a property is unoccupied, and this is still a very effective way. Some things criminals look for are weeds growing, overgrown lawn, no cars, and notices on the doors or windows. These predators are brave and will stop at nothing to find vulnerable properties, including befriending postal workers and speaking to neighbors. Today, with the majority of public records being online, criminals don’t even have to get off the couch to search through them. Someone can tell a home is vacant through county tax and deed records where the owner's address is different from the property address or looking for unpaid taxes. Estate sales are often a sign that a property will be vacant if it isn’t already, and these can also be found with a simple online search. Rental listings can be found all over including Craigslist, and if a rental has been offered for a long time, it’s most likely vacant and unwatched. There are many more ways to find these properties online, there are even services available to subscribe to.
Once the perpetrator has chosen a property, they either forge the owner’s name or create a false deed. If they forge the owner's name they often then convey the property to themselves creating a new deed with their name or chosen identity. It is important for you to understand that the term title means ownership; however, it is a concept, not a tangible document. A deed is the actual written document used to convey or transfer that ownership, however, for the purpose of this blog only, I am using the terms interchangeably. At this point in the scam, a quitclaim deed may come into play. A quitclaim deed is a type of deed that offers no warranties of actual title/ownership, it does not require an examination of title or for the grantor to provide a free and clear title. This all makes it a little easier on the scammer. Basically, a quitclaim deed just transfers whatever interest the “owner” has in the property to the “buyer”, however, it provides no warranty that the “owner” actually does own the property. Other deeds do provide some sort of warranty of ownership hence their names, General Warranty Deed and Special Warranty Deed. All deeds do need to be notarized before they can be recorded; however, a notary may or may not be knowingly involved in the fraud.
I would feel negligent if I didn’t alert you that one way many heartless predators manage to steal homes “legally” is by taking advantage of the elderly or infirmed. The elderly may be targeted by caregivers or even family members and bullied, threatened, or misled into actually signing the deed over or even signing a power of attorney.
Regardless of how the perpetrator goes about getting the deed in their name or what type of document they use, now that they have it they can use it in several ways.
Now that a deed for your home has been retained, what do they do with it?
As I said, there are many ways these criminals can profit from the deed to your home. The most obvious way is to sell the home outright to an unwitting buyer. It seems unbelievable that this can happen but houses are sold regularly without title searches, no matter how often good real estate agents advise against it. Can you imagine paying a loan as large as a mortgage without getting anything in return, well that can actually be a result of this fraud! The criminal could also take out a new or second mortgage and pocket that money, they could rent out the property or get personal loans. These are only a few of the ways to profit from this crime, but certainly not all, and as you can see the actual owner will not be the only victim of this crime.
What should you do to protect yourself?
As always, prevention is the best way to avoid this scam, and we should not just cross our fingers and hope that the recorders and notaries are not only all honest and ethical but also infallible. When purchasing a home make sure to always have a title search, purchase title insurance, and as with any insurance understand what your policy covers. You must also remain aware and diligent, not only for yourself but for more susceptible loved ones. If your county recorder offers a fraud prevention notification program, sign up. Regularly go online and review your property records through your county website, especially if they don’t offer notifications. You can check Charleston County HERE, Dorchester County HERE, and Berkeley County HERE. Check your credit report at least once a year. Pay attention to not only what you do see, but also what you don’t. For example, if you receive a demand for full payment of your mortgage don’t just write it off as a mistake, or if you don’t receive an expected bill pertaining to a property make sure to investigate. Drive by all properties you own on a regular basis and if you can’t, either have someone else do it or ask the neighbors to keep an eye on it. Do not forget to also do all of this for loved ones who cannot do it for themselves, like elderly parents living in assisted living facilities who tend to be targeted more often. If you rent property, allow someone access to your property, or allow someone to stay in a home you own, make sure to use some sort of written agreement. No matter how careful you are, criminals tend to never give up; so if you find yourself a victim of deed fraud make sure to gather and retain any and all documents, report the crime to the police or local authorities and the county recorder, and find a real estate attorney. If someone has set up home in your home make sure to begin the eviction process at once and do everything legally.
Is it worth it to pay a company for deed fraud protection?
The main way these companies are attempting to protect you is by searching records for your name on documents and they will alert you if it shows up. The problem with this is at that point the fraud has already happened. Don’t get me wrong, the sooner you find out the better, but the fact is they are not “protecting” your deed, they are strictly letting you know if it has already been jeopardized. On top of the fact that they are being extremely misleading in their advertisements, if your deed has actually been “stolen” they do nothing about it other than alert you. There is no insurance or warranties involved in these services, they do not help you clear your title, they do not reimburse you for any losses, or cover any legal fees, and there is no such thing as “locking” a deed. Be perfectly clear, these are MONITORING SERVICES ONLY. Now that you know what these companies actually do, if you do not want to take the time to regularly go online and review your property records yourself, and if you think it is worth around $20 a month to have someone else do it for you, then go for it. In my opinion, they are a waste of money, as it would only take you a few minutes once in a while to check yourself, not to mention you can’t be sure that they are actually doing what they say they are doing. A better investment is to make sure you have a title search done and get title insurance when you purchase a home, this does not protect you if your title is stolen after you purchase the home, it does protect you if the title had been stolen or forged before you purchased the home. Unfortunately, there is nothing out there that helps with any of the costs accrued when deed fraud initially takes place and that is why diligent monitoring is important, as is acting quickly to report and rectify any changes in your deed that were not initiated by you.
Although these types of crimes are happening more frequently, take heart in the fact that we are quickly developing better technology that makes it more and more difficult for these types of things to happen.
If anything like this has happened to you, I am very sorry that you had to experience it. Please consider sharing your story by commenting below. It could help someone else.
Call me today and we can talk about titles and all the other things you need to buy a house.
