By Keith Griffith |
A pernicious form of real estate fraud, known as deed fraud or home title theft, is on the rise, with devastating consequences for homeowners. This scheme involves forging documents to record a phony transfer of property ownership. Criminals can then sell the home, take out a mortgage on it, or rent it out to turn a profit.
In a recent case, Zina Thomas, a community organizer in Detroit, MI, was charged with stealing more than 30 homes by forging quitclaim deeds and transferring the properties to fictitious entities, which were then sold to unsuspecting buyers. At the time, Thomas was working for the nonprofit United Community Housing Coalition, where she directed homeownership programs.
Deed fraud often involves quitclaim deeds, simple legal documents that transfer ownership without guarantees about the property. While typically used for legitimate transfers between family members, any type of deed can be forged by increasingly sophisticated criminals. According to real estate fraud attorney David Fleck, the technology to create believable forgeries has become widely accessible, making it easier for criminals to commit deed theft.
Although no national statistics specifically track home title theft, the FBI’s 2023 Internet Crime Report recorded 9,521 complaints of cyber-related real estate and rental fraud, with losses exceeding $145 million.
How to Protect Your Home Against Title Theft
A growing number of U.S. counties offer free services that allow residents to register their names with local officials who record deeds. If any documents are filed under those names, the county alerts the homeowner. Paid services offer similar monitoring, but neither can prevent the crime—only alert homeowners after it has occurred.
The only way to resolve a fraudulent title issue is through a lawsuit to establish true ownership, typically requiring a real estate attorney. According to Fleck, the most effective protection against title theft is a Homeowner’s Policy of Title Insurance, which covers risks such as forgery or impersonation after the property is purchased. This policy shifts the burden of resolving fraudulent claims onto the insurance company, rather than the homeowner.
Detroit Case Shines a Spotlight on Quitclaim Fraud
The Detroit case involving Zina Thomas highlights the dangers of quitclaim fraud. Thomas, a real estate agent and public notary, allegedly conspired with others, including a Wayne County employee, to steal homes from vulnerable individuals, such as a cancer patient undergoing chemotherapy who received an eviction notice. The homeowner is contesting the eviction, and the case is ongoing.
“While working in a capacity to provide assistance to residents experiencing financial hardships, Ms. Thomas allegedly exploited individuals in the process of losing their homes,” said Cheyvoryea Gibson, special agent in charge of the FBI in Michigan.
Original article: https://nypost.com/2024/04/01/real-estate/deed-fraud-is-on-the-rise-heres-how-to-protect-your-home/
