Mortgage Ownership Scam: A new twist on identity theft
If there is an inventive way to steal a person’s identity, there’s likely a fraudster somewhere who will come up with yet another sneaky method. Enter the mortgage ownership scam or “deed theft.” There is no smash and grab, there isn’t even a deceptive email or text to entice you into a scam. This particular fraud is often committed behind the scenes by criminals researching their prospective targets first: homeowners with their mortgages paid off, with plenty of equity. This is a scam that hasn’t been very common over the years, but new deed-theft cases are now appearing from coast to coast.
Basically there are two variations. The first iteration involves the deed thief transferring ownership of a property to themselves by filing the deed with a county clerk who then records the “sale.” The property is then quickly sold to an innocent and unsuspecting victim. The second version involves deceiving a homeowner, perhaps a desperate one, insisting that they sign a deed to transfer ownership, usually promising to help the homeowner refinance their mortgage or borrow on the property’s equity, or pay overdue property taxes.
Often a property owner will discover the scam by paying their property tax only to be informed that the taxes have already been paid — by a complete stranger. Records will show that the property will have been sold, unbeknownst to the real owner. The scammers who “sold” the property will create a fake deed using a forged signature — essentially stealing the land right out from under the actual owner. This is when it’s time to hire an attorney and file a complaint with law enforcement. This can be a complicated effort, but there is no other recourse.
It’s not only the homeowner who suffers, but also those who purchase a property from a deed-theft fraudster. From AARP:
Greg Bugaj bought a parcel of land in Fairfield, Connecticut, from a man who claimed to be the owner. Bugaj and his partner started work on a 4,000-square-foot home they planned to sell. But it turned out the real property owner was a Long Island doctor who only found out about the fraud when told someone was building a house on his land.
The case is tied up in court. Bugaj said through his lawyer that he “may never fully recoup the hundreds of thousands of dollars” he paid out of pocket on the project.
Maureen Kokeas, in the New York City Sheriff’s Office, says many can’t afford a civil lawsuit, which is often needed to regain property ownership. “Unfortunately, getting your property back often comes down to dollars and cents,” Kokeas says.
Property Deeds: 4 Things to Know
1. What it is: A property deed is a document that transfers ownership from one person to another. Typically, your home deed is held by a local government land records office.
2. Whose name is on it? If you own the home outright, it will be yours (and perhaps your spouse’s). If you have a mortgage, it varies by state: In some, your name is still on the deed, but the bank has a lien on the property. In other states, the bank holds the deed until the loan is paid off.
3. How to protect it: It takes your signature to finalize the transfer of a property. Never sign a real estate document under pressure. Take documents to a reputable lawyer to be clear what you are signing.
4. What else to watch for: Never disregard mail, especially tax and other home-related documents, sent to another name at your address. That could suggest someone has illegally transferred your deed to their name.
If you live in San Diego County, you can register with this service:
Owner Alert is a free real estate fraud notification service from our office that sends an immediate email notification to subscribed property owners anytime a document is recorded in our office that transfers title to your property.
This new service uses cutting-edge technology with 24/7 monitoring to help protect your home and property title. Enroll now in less than 5 minutes with an email address and your Assessor Parcel Number (APN).
How to identify mortgage fraud
Following are six red flags that may indicate you are dealing with fraud:
• A company/person asks for a fee in advance to work with your mortgage company to modify, refinance or reinstate your mortgage.
• A company/person guarantees they can stop a foreclosure or get your loan modified.
• A company/person advises you to stop paying your mortgage company and pay them instead.
• A company pressures you to sign over the deed to your home or sign any paperwork that you haven’t had a chance to read and you don’t fully understand.
• A company other than your mortgage company claims to offer “government-approved” or “official government” loan modifications.
• A company/person you don’t know asks you to release personal financial information online or over the phone.
Consumer Guide: Understanding & Protecting Yourself From Title Fraud
Title fraud is a serious crime that can be overlooked and result in a property owner unknowingly losing the title of their property. Here’s what you need to know about title fraud, how it happens, who’s most at risk, and how you can prevent it from happening to you.
What is title fraud, and how is it different from other scams?
Title fraud, or deed theft, is when someone illegally transfers the title or deed of your property without your knowledge, often using forged documents or fake IDs. The criminal’s goal is to steal your money by making it seem like someone else owns your property or that you transferred your property to someone else. When left unaddressed, title fraud can result in foreclosure or eviction—even if you still live in the home.
What Is Home Title Fraud?
Home title fraud is a serious type of real estate scam that happens when a criminal steals a home’s title and puts it in their name. Then fraudsters may use the property title to commit further criminal acts, including selling the home or using it as collateral on new loans—all without the homeowner’s knowledge. While this type of fraud is rare, it can result in serious financial consequences for homeowners.
There’s no way to completely safeguard yourself against home title theft. But by learning the signs and what to do if you suspect home title fraud, you’ll be better equipped to protect your home, finances and credit.
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