Deed theft is a growing problem in many areas. Scammers can access real estate records, forge a deed transfer, and end up owning property for free. In one case, a group of people stole homes worth a million dollars. But how does it all work?

How property deed theft works

First, scammers access property records through public records research. Since all real estate records are public, they can see everything about the title or deed ownership, including the owner’s name, their address, any mortgages, and if they have absentee ownership (meaning the mailing address for their tax bill is different from their property address).

If they find a property where the owner purchased it for cash, there’s no mortgage, and the address on their tax bill is different than the property address, they can assume it’s an absentee owner who lives somewhere else and has no mortgage. They then type a fake property deed on a computer, forge the owner’s name, and file it with the county. This transfers the property to a phony company.

The scammers forge a signature for the owner and get two witnesses who are just made-up people. They then file the deed, and the county recorder files it, assuming it makes sense. Now, the property is transferred to the fake company, and the scammers can put it up for sale, get a mortgage on it, or take the cash or lien and run away with the money.

Meanwhile, the actual property owner starts getting notices that their property was sold, has a lien on it, or owes payments. They’ll run a title search and find out there was a deed theft on their property. This can be undone, but it requires a lot of steps, getting the courts involved, getting a lawyer, and spending a lot of money. The people who took the money are long gone and often use fake IDs and account numbers to get the cash out.

How to prevent property deed theft

To prevent this, property owners can file a notice of intent on their deed or a notice of freeze on their deed. If anyone sees this, they know they’re looking for a release before transferring the property. If you’re an investor or purchaser of a property, make sure you perform due diligence on the seller, don’t rely on copies, and have an escrow company that knows what they’re doing.

Deed fraud is not gone, it’s still running and out there, and it’s something you want to be aware of so you don’t get caught up in losing money in a scam. This scheme uses disbarred attorneys to get fake social security numbers and driver’s licenses and goes to great lengths to cover it up before the valid owner notices it. 

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