"A significant concern in real estate is deed fraud, also known as home title theft. This illicit activity involves criminals manipulating legal documents to falsely assert ownership of a property," said professional fiduciary and certified elder law Attorney RJ Connelly III. "Fraudulent activities involving the forgery of signatures and the alteration of records are employed to facilitate illicit property transfers, which are subsequently recorded with relevant authorities. Once control over the property is secured, individuals may either sell the residence to unwary purchasers or secure mortgages, diverting funds from financial institutions. This form of fraud encompasses all types of home deeds, including warranty deeds. Homeowners must remain vigilant and proactively safeguard their property titles against such deceptive practices."
When a criminal successfully acquires the deed to a residential property, the consequences can be substantial. The following delineates potential actions that may be undertaken by the fraudulent "owner," including obtaining cash from the equity of the home through mechanisms such as a home equity line of credit (HELOC) or as part of a refinanced mortgage, liquidating an unoccupied residential or commercial property asset, or collecting rental income generated from the property.
"Fraudsters may target unsuspecting homeowners by posing as counterfeit lenders, extending offers to refinance at lower interest rates," continued Attorney Connelly. "This issue is especially common among homeowners who find themselves in financial difficulty or elderly individuals who may be more vulnerable due to a lack of awareness or understanding of legal documents. In some cases, scammers may approach these individuals using deceptive tactics to gain their trust."
Who They Target
Scammers often target homeowners with significant home equity, particularly senior citizens who may not closely monitor their financial statements or credit reports for signs of deed fraud. These individuals can become easy prey for sophisticated schemes due to their trust or lack of awareness.
Homeowners with vacation or investment properties that may be unoccupied for prolonged periods are also at risk. This absence of oversight allows scammers to engage in fraudulent activities unnoticed.
"Heirs of deceased property owners may become targets of fraudsters who deceitfully assert ownership before the rightful heirs can claim their inheritance," Attorney Connelly observes. "Such fraudulent actions can result in legal conflicts and significant emotional distress for the legitimate heirs. Awareness and vigilance must be heightened to protect these vulnerable populations from the risks associated with deed fraud."
How to Protect Your Home Title
In light of the increasing opportunities for deed fraud, it is imperative to adopt proactive measures to protect the title of your home. We will examine various strategies for effectively safeguarding against such fraudulent activities.
Keep Track of Vacant Properties - Obtain certified copies of your property deed from your county's official records website or the local tax assessor's office. If unsure about the correct county, the National Association of Counties (NACo) website can help identify it. When requesting your deed, be ready to pay a small fee for public records access. Once you receive the document, carefully check that it includes the correct owner’s name, property identification number, total square footage, sale prices, and dates. Also, confirm that the deed holder's mailing address is accurate. If you find any discrepancies, like an incorrect address, contact your state’s franchise tax board for guidance on updating your information.
Protect Your Identity - Identity theft can facilitate instances of deed and real estate fraud; therefore, it is crucial to implement measures to prevent such crimes. Discussions with a qualified elder law attorney can provide valuable insights on maintaining safety. It is also essential to ensure the security of one’s mail. It is advisable to forward any correspondence received at vacation or rental properties to one’s primary address. Additionally, the application for a post office box may serve as an effective deterrent, obstructing potential thieves from accessing and stealing mail.
Start Probate - Probate is the legal process for evaluating and distributing deceased assets. Hiring an elder law attorney to create a legally binding will and a comprehensive estate plan is advisable to ensure a smooth estate transition. Designate heirs for specific properties and choose a trustworthy executor. The executor submits the will to probate court and manages the identification, valuation, and distribution of assets, including real estate and individual property. It's important to communicate any debts or tax obligations to the executor. These steps can help honor the deceased's wishes and streamline the estate distribution process.
Know What You're Buying - When acquiring property, you must be aware of scams that can lead to significant financial losses. To misappropriate deeds or identities, fraudsters may offer "once-in-a-lifetime" deals on abandoned properties. Another tactic involves impersonating deceased individuals to falsely claim property ownership, known as "ghosting," which is a form of identity theft. Conduct thorough research to protect yourself as a homebuyer. Always verify public records and examine property histories before any transaction. Pay attention to title transfers and quitclaim deeds (A quitclaim deed is a legal document that transfers property ownership from one person to another. It's often used in non-sale situations, such as between family members or to fix an error in the original title) that could forfeit the owner's rights. Before closing a deal, have an attorney review the seller’s purchase records and confirm their identity through multiple forms of ID. This diligence can help reduce the risk of property fraud.
Check Your Credit - Many people only check their credit reports when making a substantial purchase, but regularly reviewing them is crucial for spotting potential fraud. Federal law allows consumers to obtain three free annual credit reports from Equifax, TransUnion, and Experian. If you find any suspicious activity, immediately contact your bank to cancel credit cards and close accounts. Consider initiating a credit freeze to limit creditor access to your credit file. The three major bureaus allow you to freeze and unfreeze your credit without charges. These steps can help protect your financial information and reduce identity theft risk.
Title Monitoring Services - Home title monitoring is a vital service that helps homeowners keep track of their property's deed, equity, and mortgage, allowing for peace of mind. Many top monitoring services offer features like identity theft protection, credit monitoring, and access to fraud resolution specialists. A title insurance policy can be beneficial as it covers expenses related to home deed theft. However, it's important to be cautious of fraudulent websites, as identity thieves often create fake versions of legitimate insurance sites to collect sensitive information.
A Final Note
"In the current digital environment, property owners encounter a range of risks, including identity theft and title fraud. These threats encompass the unlawful transfer, mortgage, or sale of property conducted without the rightful owner's consent," said Attorney Connelly. "Such fraudulent actions can lead to significant legal and financial consequences for homeowners. As fraudsters become more sophisticated, property owners must educate themselves and take protective measures. Understanding these methods allows homeowners to identify risks early. By staying informed and using various strategies, property owners can strengthen their defenses against deed fraud and protect their real estate investments."
Please note that the information provided in this blog is not intended to and should not be construed as legal, financial, or medical advice. The content, materials, and information presented in this blog are solely for general informational purposes and may not be the most up-to-date information available regarding legal, financial, or medical matters. This blog may also contain links to other third-party websites that are included for the convenience of the reader or user. Please note that Connelly Law Offices, Ltd. does not necessarily recommend or endorse the contents of such third-party sites. If you have any particular legal matters, financial concerns, or medical issues, we strongly advise you to consult your attorney, professional fiduciary advisor, or medical provider.
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