Do we know how often Home Title Theft occurs?
As a former real estate fraud prosecutor, I have personally witnessed the impact of forgery, identity
theft and deed fraud on dozens of homeowners, and victims have asked me how common this crime is?
The short answer is: This type of fraud occurs often enough that every homeowner needs to be aware
of it and to actively take steps to protect themselves. Although exact numbers are hard to come by, I
have used available data from the title insurance industry and the real estate industry to estimate
that homeowners report between 1500 and 10,000 incidents each year of title fraud to their title
insurance carriers.
How do criminals commit deed theft and steal houses?
Initially, let me explain that the words “steal” and “theft” are not 100% accurate in this context, but they
are a short-hand way of explaining that fraudsters make it appear that they own your home. They make
the world believe that they purchased your house from you, received it as gift, or bought it at a
foreclosure sale. Then they steal your personal information and forge deeds to persuade mortgage
companies to lend them money, with the house as collateral, or to persuade unsuspecting buyers to
purchase the house from them. Most importantly, their forged deed is so believable that it convinces at
title company to insure the transaction.
Criminals use a variety of methods to commandeer title to homes, and I made five 2-minute YouTube
videos on the subject, starting with this one.
Find the other four videos on the Veritable Data Solutions’ channel on YouTube.
Is home title theft that common?
In my career as a deputy district attorney in Los Angeles and then as a private trial lawyer, I have
personally represented dozens of victims of home title theft. One con artist named James Rojas, who I
prosecuted and sent to prison back in 2008, victimized 100s of homeowners before the Los Angeles
Sheriff’s Department took him into custody. Here’s an old video of me during that trial when John
Schwada, a local news reporter, interviewed me.
Mr. Rojas got out of prison 7 years later and started right up again, committing home title theft. By that
time, I was in private practice, and several victims contacted me to sue him. Fortunately, the Ventura
County District Attorney’s Office took him down, and this time the judge put him behind bars for 14
years.
A judge recently sentenced the most prolific fraudster in the history of Los Angeles, Michael Henschel
AKA “Mickey,” to 20 years in federal prison. This was a long time coming. At his sentencing, the
prosecutor told the judge that she estimated Mickey had victimized tens of thousands of homeowners
over the course of a 4-decade long crime spree.
Once these criminals start to commit deed fraud, they don’t stop…because it is so easy. Fraud detectives
tell me that organized crime has discovered this scam, and these mobsters have begun to scale it up as a
lucrative source of revenue.
The actual numbers are hard to come by. The FBI doesn’t segregate home title theft from the other real
estate-crimes, and the other organization that has a national presence, the American Land Title
Association, has not yet begun to keep the data. Furthermore, too many commentators conflate title
theft with wire fraud, mortgage fraud and other related crimes.
I have personally made my best efforts to come up with a hard number. We know that from year to year
the title insurance industry pays out $500M to $750M to resolve claims by homeowners against their
title insurance policies. By talking with “insiders” who work for major title insurance carriers, I have
learned that, depending on the year, 40-80% of those claims arise from title fraud.
Based on those numbers, I calculated that 1500-4500 homeowners make a claim of home title fraud
each year. Using a slightly different methodology, I calculated that the number might reach as high as
10,000 per year. If someone in the title insurance industry has a more precise figure, please contact me
and let me know.
Sadly, based on my personal experience, I know that many incidents of home title theft involve
“insiders” – family members or caregivers – who commit this crime against an older, dependant adult.
Typically, when an insider is involved, no report or claim gets made, and there may be 2 or 3 times (or
more!) of these cases than of those that actually get reported.
How serious is Deed Theft?
Way too often, I read articles or watch YouTube videos by people who have never experienced home
title fraud, and they cavalierly tell their audiences that they have nothing to worry about. The vast
overwhelming majority of homeowners will never experience a house fire, yet these so-called experts
would never say that homeowner’s insurance is unnecessary.
Once a con artist files a forged deed, there is no easy way for you as a homeowner to remove that deed
from the title history of your house, and if yoi ever want to sell the house or refinance the mortgage,
you will have no choice but to take steps to “quiet title” into you name. “Quiet title” is an old legal
phrase that refers to a special kind of lawsuit in which a judge makes a final determination to return title
to your home back to you. As a result of that lawsuit, the forged deed will be cancelled.
There are three ways this process can become complicated. First, the con artist might have already
taken out a loan, using the property as collateral, and second, they may have sold the home to
unsuspecting buyers. In both of these situations, there are additional parties involved, who stand to lose
a lot of money if the true homeowner retains title. Both will dig for evidence to show that the
homeowner participated in the crime. Now, they won’t find that evidence, and the homeowner should
get the property title back at the end of the lawsuit, but the parties’ due diligence will extend the length
of the lawsuit, costing everybody more money and heartache. Third, in many cases the fraudster doesn’t
forge the deed but, rather, cons the homeowner into signing a deed. In these cases, the homeowners’
claims on title are not as clean cut, and the judges have to balance the equities of the victimized
homeowners and the unsuspecting buyers.
In the saddest cases, the homeowners actually lose their homes altogether. This typically happens with
older homeowners, whose relatives or caregivers have defrauded them. It also happens to less
sophisticated homeowners, who don’t know to hire a lawyer, and to poorer homeowners, whose title
insurance policies do not cover this situation and who can’t afford lawyers.
Conclusion
Home title theft occurs often enough – 1500-10,000 reported cases per year – that every homeowner
needs to be aware of it. They don’t need to lose sleep over it because inexpensive services like
TitleShield™ and Home Title Lock that offer title theft protection and can help them avoid being
victimized and help them minimize the damage if are. More importantly, people who own a vacant
vacation home and need to keep an eye on their title because it is at risk. Similarly, people who have
older parents or grandparents need to watch them carefully because they are prime targets for con
artist who perpetrate all sorts of scams, including home title theft.
– David Fleck, CEO
