A Different Type Of Home Robbery: How To Prevent Deed Theft, And How It Happens

When it comes to home robbery, people usually fear losing expensive items like laptops, jewelry, or TVs. But the roof overhead or the dirt underfoot? Surely, that's absurd. Yet the unfortunate truth is that some people are losing their homes and land to con artists in a phenomenon known as deed theft (also called title fraud or deed fraud). The worst part is that homeowners may not discover it until they decide to finance, refinance, or sell their home. Some, sadly, live their entire lives without any inkling, with the situation coming to light only when their children sort out their inheritance.

So how is deed theft possible? After you sell your house or buy someone else's, you must draw up a deed, which is a legal document recording the transfer of ownership. This deed is then recorded with the local county register, which updates records accordingly. What happens in a deed theft is that a fraudster manages to falsify a deed and fake ownership of your home so they may make money off it, say by mortgaging or selling the property. Depending on the situation, there are myriad ways it can come about.

While a false deed doesn't deprive you of true ownership, it does leave you in a legal bind, and getting out of it often involves hiring expensive attorneys and spending time in court. However, if your title insurance explicitly protects you against fraud after you've bought the home, you may have an easier time resolving this mess (homes bought before 1998 usually lack this coverage). Either way, there are steps you can take to protect yourself from deed theft.

As you would expect from con artists, they tend to go for specific profiles. They often target older people, who are more likely to have paid off a home's mortgage and have higher equity. They also target vacant or abandoned lots, rental properties, and second homes, where owners are less likely to notice any fraudulent sales because they aren't always present. Contrastingly, homes belonging to vulnerable populations, including immigrants and people of color, and those up for foreclosure or running behind on taxes also make common targets.

Modus operandi is highly variable. The obvious one is outright stealing the property deed and forging the owner's signature to create a new one. For this reason, it's important to manage and organize all of your important documents properly. Sometimes homeowners are tricked into signing a deed by fraudsters who falsely claim it's a different document, or they're told that a specific condition necessary to transfer the home was met when it was not. Scammers may pretend to "help" owners avoid a foreclosure, or pretend to have power of attorney. They may scour public records for homes due for foreclosure, pay off the due taxes, and use a false deed to mortgage or sell the home. Yet another method involves forging a quitclaim deed. Usually employed for family transfers or to eliminate title confusion, a quitclaim deed transfers ownership sans any warranties. 

Whichever the method, impersonating the original owner is surprisingly easy, as the information is publicly available or can be bought on the dark web or through phishing. Once a notary signs the fraudulent deed and it's recorded with the county register, the thief can take out a mortgage or rent the property out and run with the money.

If you're wondering why the local county register would record a change in the property's ownership without notifying you, that's because in many counties, they don't need to. As long as requirements are met, they must record the new deed, which allows swindlers to do as they please. You can check whether your county offers free title alerts to homeowners on Property Fraud Alert. By signing up with your county where available, you'll be immediately notified whenever a new document that has your name on it is recorded.

Additionally, check current property records for any changes in ownership or unfamiliar deeds or mortgages, and make this a regular habit. Frequently check your credit report to safeguard against fraudulent activity. If you own a vacant lot or second home, make regular rounds to ensure there are no squatters or "for sale" signs. Consider engaging your neighbors or a management company to keep you informed.

You may also want to register for alerts on Google or Zillow, so you can find out right away if someone has listed your property for sale. Additionally, make sure that the county treasurer or tax department has the right mailing address. This way, you're staying abreast of all tax notices and bills. Should these, or other important bills like utilities, fail to arrive on time, there's a chance that someone may have tampered with property records. Most importantly, consult a real estate attorney before you sign any documents or deeds, and never sign anything under duress.