They Stole My House!
The Miami Herald reported last week (See Article HERE) that the Broward Sheriff’s Office has arrested 7 people on more than 600 charges of grand theft and identity theft. The accused allegedly fraudulently took ownership of 44 homes in Broward County, including from the estates of 18 deceased people. The article did not contain a lot of detail but did say that at times, the accused would sell the same house to multiple people and collect payments simultaneously.
We know how easy identity theft is, but how can someone “steal” a house? Unfortunately, it also is too easy. I’m not pretending to know how this ring operated, but fraud and forgery are often simple crimes to perpetrate, particularly when the victim is in financial trouble. Foreclosure rescue scams are one way to fraudulently gain possession of a home. Here, the scammer will approach a debtor in or near foreclosure with promises to bail the debtor out. The scammer will either promise to take over the mortgage payments and allow the debtor to continue to live in the house for a small fee. Or, the scammer will make a small cash payment to the debtor and “pay off” the mortgage. In return, the debtor is to make payments to the scammer. In either case, the debtor is provided with a stack of papers to sign. Instead of a note and mortgage, the debtor signs a deed, but is not told that the house is being transferred.
The mortgage is never satisfied. The debtor makes the new lower “loan” payments to the scammer. Meanwhile, the scammer sells or mortgages the house and walks away with the cash. At some point the original lender, or a new lender or both, or a new “owner” come knocking on the door seeking possession of the house. The debtor thinks he has been paying the new loan and can’t understand why he is being forced out of his house.
Sometimes, in fact often, the scammer has made multiple loans or sales and never records the mortgages or deeds. The scammer has conspired with a title company to allow this to occur. The original owner has no clue that he has signed away ownership rights and soon finds himself in a battle with multiple people claiming ownership and mortgage rights. This scam isn’t really difficult to prevent. Simply read documents that you sign and understand what you are signing. Get a lawyer. The problem is that desperate people take desperate measures and are easy targets.
Forgery is harder to prevent. If someone forges a deed, power of attorney or mortgage it is very difficult to spot after the fact. The successful forger needs a compliant notary and witnesses or access to a notary seal. E-filing and E-recording makes it easier for forgers to succeed. Original documents are no longer presented when presented for E-filing or recording. Thus, a forger need only obtain a decent copy of a previously notarized and witnessed document and then copy and paste a forged signature onto a document. The forger will then have no contact with 3rd parties and the document will look appropriately executed of record.
Forgeries are a prevalent problem in real estate transactions and title companies continue to warn agents to be on the lookout for potentially forged documents, having suffered millions in claims over the last several years. A forged deed can be recorded on any one’s house without knowledge of the owner. The subsequent sale will likely be the one that is the problem. Watch for documents that are recorded where mortgages aren’t satisfied or the notary block is “off”. By off I mean several things: the block could be crooked, the font could be different than the rest of the document or have streaks in it, the county in the jurat might not make sense or the notary’s commission might be expired.
One other common scam is the sale or lease of a home over the internet via a Craig’s List like site, even VRBO or some other lesser known site to a foreigner. Sometime the home may be actually listed and shown on MLS or Zillow or other sites and sometimes the home is randomly selected. In either case, the scammer has just enough information to make it plausible that the lease or sale is real. A friend of mine one time answered his door to find a family of 4 from South America outside with all of their belongings. That had rented his house for 6 months over a site in South America because “Sister Kelly”, my friend’s wife, was on a humanitarian mission to Africa. My friend and Kelly had just married and this was Kelly’s house. That had recently listed the house for sale. Needless to say, Kelly was not a missionary nor in Africa. This family had been scammed and had lost their money. Fortunately for my friend and his wife, they were home when these people arrived. Had they not been home, they may have attempted to break in.
While the threat or someone stealing your house seems remote, it is more common that most would think. So many of these scams are hard to predict and prevent. However, the easiest marks are the financially distressed. As in any case involving fraud, read everything before you sign, as questions and contact an attorney.