In most U.S. counties, anyone can file paperwork with the deed office saying they now own your home and the registrar of deeds won’t check to make sure that paperwork is real.
While it’s rare that a scammer would file a fake deed, it’s a growing problem in California, says the state Department of Real Estate, which last week issued a consumer alert on fraudulent property deed scams.
“In the current economic climate, criminal fraud related to real property deeds is on the rise and home owners should be on the lookout for red flags to ensure the title to their property is protected,” says Barbara Bigby, acting California real estate commissioner.
How do the scammers benefit? Once they put your home in their name, they take out a mortgage and walk away with the proceeds, or try to steal your home from you or your heirs.
DRE has also seen these cases:
- Home owners unknowingly signed deed transfer forms with blank spaces that were later filled out to transfer ownership.
- Scammers tell the home owner a deed wouldn’t be filed except under certain conditions, but the deed is immediately recorded.
- Troubled home owners are told signing a deed transfer will stop foreclosure.
- Your original deed is stolen and used to create a false new deed.
DRE recommends you keep your deed in a secure place and watch for these clues that someone may have filed a false change in ownership for your home:
- You stop receiving your property tax bill or notices.
- You receive a Notice of Default or Notice of Trustee’s Sale when you own your home outright, or when you have a mortgage and you are not delinquent on your loan payments.
- You receive loan documents in the mail for a loan or transaction that you have no knowledge of.
- You learn of a recorded document on your property where ownership in your property, or a portion thereof, was transferred or sold to another party without your knowledge.
- You learn of a recorded document on your property where the signer of the document was deceased at the time of execution of the document.
- Changes or alterations were made to a recorded document after you signed it.
If you see any of those warning signs, immediately take these steps:
- Check with the County Recorder’s Office to see if any changes to your deed have been filed and tell them what you saw.
- Report the activity to local law enforcement. Many counties now have real estate fraud divisions within the office of the District Attorney.
- Most recorded documents require a notarized signature and as such, a complaint should be filed with the Secretary of State, Notary Public Section, if you suspect a forged signature on a notarized document.
- Ask your title insurance company to determine if forged deeds are covered under your title insurance policy.
- File a complaint with the DRE if you suspect that a real estate broker or salesperson, or unlicensed person purporting to be a real estate licensee, is involved in the forging of any deed or fraudulent recording of a false, fictitious, or forged deed.
- Consult an attorney. Bogus deeds may be void or annulled.
Source: California DRE