Home Title Fraud Explained

Explained most simply, home title theft or home title fraud is a crime in which a con artist makes it appear that they have the authority to buy or sell a house or to borrow money against the house. To do this, they use many different crimes including the following:

  • Forgery
  • Grand theft
  • False Documents
  • Title theft
  • False representation
  • Money laundering
  • False impersonation
  • Strawman fraud
  • Identity theft
  • Equity purchase fraud
  • Recording false documents
  • Foreclosure consulting fraud
  • Providing false financial statements
  • Fraudulent conveyance
  • Mortgage fraud
  • Wire transfer fraud
  • Loan fraud
  • Wire fraud
  • Notary fraud
  • Mail fraud
  • Financial elder abuse
  • Conspiracy

Unfortunately, there is no central authority who gathers data about home title fraud. However, we can make a rough estimate of the total instances of home title theft that get reported every year to title insurance companies.

We know that from year to year, the title industry as a whole pays out between $500M and $750M to resolve title claims. We have spoken to numerous people in the title insurance industry, who have estimated that 40% to 80% of those claims are based on fraud.

Based on this information, we estimate that between 1500 and 4500 home title theft claims are made every year in the United States, and we estimate another 2 to 3 times that number never get reported at all. Merely in the County of Los Angeles (where TitleShield™ was created), residents make approximately 500 reports of real estate crimes every year.

How do con artists commit home title fraud?

There are three primary ways in which home title theft is committed: By Tricking the Notary, By Skipping the Notary, and By Using Undue Influence on the Homeowner.

Tricking the Notary

Con artists need other people to help them commit their crimes, but if these assistants know they are helping, then they will want a share of the proceeds. To keep as much money for themselves as possible, fraudsters con people into doing things that, in hindsight, they can’t believe they did.

Our CEO once prosecuted a case in which the notary pre-stamped and pre-signed 100 blank deeds for the con artist. Then the con artist was able to use those deeds to steal ownership of people’s homes. In this case, the notary trusted the fraudster, and the fraudster told the notary that he helps people who are in foreclosure and often they don’t have enough time to get to a notary. He persuaded the notary that the pre-stamped deeds would help him help people who were being victimized by unscrupulous banks. Obviously, at the end of it all, the notary felt very foolish, and his notary commission was revoked. Fraudsters will also trick notaries by using fake IDs.

Recently, the U.S. Customs and Border Protection seized almost 3,000 fake IDs from China that were destined to customers across the United States. It makes you wonder: how many shipments enter the country without being caught? Unfortunately, modern fake IDs are undetectable to the naked eye, so the only way for the notary to discover them is to use technology like we built into our notary app, Veri-Lock™ (www.veri-lock.com ).

Skipping the Notary

Modern computers, including every home computer, contain the technology to make believable fake documents. This includes forged signatures and forged notary stamps. With such technology, con artists often don’t need to appear in front of a notary at all. They can simply forge your signature on a deed and forge the signature and stamp of the notary. Then they present this high-quality fake document to the county recorder’s office, and – voila! – it appears to everybody in the world that they own your home. The most clever con artists might even forge the documents that make it appear your mortgage was paid off.

With these fake documents, the con artist can obtain a mortgage loan or sell your house to an unsuspecting buyer. In each case, the con artist pockets 100s of 1000s of dollars and disappears into the wind.

 
 

Skipping the Notary

Modern computers, including every home computer, contain the technology to make believable fake documents. This includes forged signatures and forged notary stamps. With such technology, con artists often don’t need to appear in front of a notary at all. They can simply forge your signature on a deed and forge the signature and stamp of the notary. Then they present this high-quality fake document to the county recorder’s office, and – voila! – it appears to everybody in the world that they own your home. The most clever con artists might even forge the documents that make it appear your mortgage was paid off.

With these fake documents, the con artist can obtain a mortgage loan or sell your house to an unsuspecting buyer. In each case, the con artist pockets 100s of 1000s of dollars and disappears into the wind.

 

Using Undue Influence

As we get older, we eventually reach the point where we need help in our daily lives. At that point, we either hire a caregiver or a family member to assist us, and we eventually become dependant on these folks. Unfortunately, some of them are unscrupulous and unethical. Some of them take advantage of the position of power they have over us, and they pressure us into signing documents that we don’t really want to sign, such as deeds, powers of attorney and new wills. This is called undue influence.

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