Article by:
Ryan Toohil
Because homeowners can lose significant money on residential, retail, or timeshare investments, title scams are considered a form of real estate fraud.
Although this crime seems complex, the FBI reports that deed fraud is fairly common. According to the Internet Crime Complaint Center (IC3) [*]:
There were ~11,000 victims of real estate fraud last year.
And contrary to what you might think, these cases don’t always take place in areas with unoccupied real estate. In 2021, a federal grand jury indicted Jeffrey Young-Bey and Martina Jones for preparing fraudulent property deeds in densely-populated Washington D.C. After transferring titles to their own corporate entity, the duo pocketed over $500,000 in property sales.
The unsettling reality is that any homeowner can become the victim of deed theft — particularly those unequipped with the knowledge and know-how to prevent it.
How Does Deed Fraud Happen?
Over time, scammers have developed various methods of committing title theft, including:
Falsifying documents to transfer ownership. Scammers use property register databases to scour for target properties and then use property records as templates to forge deeds. In New York, for example, anyone can use the Automated City Register Information System (ACRIS) to locate property records dating back to the 1960s. With a forged deed in hand, all a scammer needs is false identification or a phony notary service to complete the transfer.
Impersonating property owners by using stolen identities. Fraudsters can use your birth date and Social Security number (SSN) to take out a reverse mortgage or refinance your home and cash out the equity. Sadly, family members are common inroads to identity theft. They know your personal information and can use it to open loans or other financial accounts.
Coercing vulnerable targets. Swindlers prey on homeowners in default. They masquerade as loan officers and “guarantee” a loan modification — or demand hefty fees to “help” homeowners avoid foreclosure. Some scammers use severe scare tactics to convince homeowners to transfer over their property rights, enabling the scammers to sell or rent out the property.
Insider collusion to access property records. The most devious grifters work with co-conspirators in the mortgage industry to transfer titles to shell companies. In a recent case, Clarence Roland III was sentenced to 120 months in federal prison for soliciting the help of co-conspirators in his real estate fraud scam . They established 11 business entities to sequester the proceeds of fraudulent property sales. Read More..
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