Reasons To List With A Professional Real Estate Agent (This is the 6th in a series of 10 real life situations)

Often Title or Deed Scammers Target Elderly

Evelio and Milagros Esteban are in their 70s and they’ve been homeowners for years. But recently they ran into trouble paying their mortgage. That was when they mistakenly transferred their home deed to another Miami resident, who offered to help them rent out their home. Thinking they were signing a Section 8 housing application — which would help them rent out space affordably to low-income people — they in fact signed a quitclaim deed.

Quitclaims have appropriate uses. They can work perfectly to convey property interests between trusted people in the right situations. Unlike a transfer by warranty deed, a quitclaim doesn’t involve a title search. So it is an efficient way to convey a home from one person to the next, without surveys, appraisers, inspectors, or agencies in the middle. But the same traits that make quitclaims convenient also make them easy to manipulate. Having recorded the quitclaim in the county records, a deceptive person can apply for loans on the property’s value, sell the house, or rent it out. The person who took advantage of Evelio and Milagros had the third option in mind.

That new owner became their landlord. Suddenly, Evelio and Milagro found themselves squeezed into a bedroom as other people started renting rooms in what used to be their house. A surreal story? Wait. It gets even worse. A quitclaim deed conveys property ownership — not the mortgage. The duped homeowners still owe the mortgage payments that created this scene in the first place.

Although they did not mean to sign their home away, Evelio and Milagros did just that. To the Economic Crimes Bureau in Miami-Dade County, it’s an all-too-common situation. Elderly homeowners especially fall into such traps, agreeing to “sign here, initial there” because they think the other person is helping them. They might even be signing a number of legitimate papers — and fail to notice that one in the stack that’s a problem.

Meanwhile, in Connecticut…

A lawyer called the police to report what seemed to be a falsely notarized quitclaim deed. The owner of the house was in a care home and had nothing to do with the notarization. The notary involved is now being investigated and could be charged in connection with the fraud. The alleged fraudster, who lived in the Fairfield County house, is free on bond until arraignment.

While scammers are drawn to quitclaim deeds for easy transfers of property, the archaic system of notarizations is yet another issue. This makes the abuse or falsification of notarial documents a major problem in real estate conveyances. By the time the instrument gets to the recorder of deeds, the fraud is usually a fait accompli. Under the law of most states, it is not the county recorder’s role to investigate documents for fraud or false signatures.    

Around the Same Time, in Wisconsin…

An Oshkosh resident who held the power of attorney for a 92-year-old care home resident was charged with wrongly taking the house from the nonagenarian, using — you guessed it — a quitclaim deed.

A power of attorney might be drafted for estate planning, along with a will. It appoints someone as an agent, so that when a person loses the ability to make legal decisions, a representative’s decision-making power can be used. As you see, the selection of the agent can backfire. The manipulator in this case knew the rightful homeowner for decades, and did landscaping work for her before she entered the care home seven years ago.

Title or Deed Scams

Con artists search public records to find mortgage-free homes or homes with significant equity, many of which are owned by seniors. Posing as the homeowner, these criminals fraudulently obtain mortgage loans and disappear with the money. When mortgage payments are not made, the lender forecloses.

According to Forbes, home title theft is a type of real estate fraud where someone uses a homeowner’s personal information to forge a deed and steal their home. The thief may apply for a home equity loan or line of credit in the homeowner’s name and then fail to make payments—exposing the owner to foreclosure and credit damage.

In the case of unoccupied homes, like secondary residences, the fraudster might sell the house without the owner’s knowledge or rent out the property without permission.

According to the FBI’s Internet Crime Complaint Center (IC3), which provides the public with a means of reporting Internet-facilitated crimes, there has been a steady increase in losses reported by victims of real estate/rental scams in the last three years.

Nationwide, in 2021, 11,578 people reported losing $350,328,166 due to these types of scams which is a 64% increase from the previous year. Here in the Boston Division, which includes all of Maine, Massachusetts, New Hampshire, and Rhode Island, 415 victims reported $13,424,269 in losses which is a 27% jump.

• 42 victims in Maine lost $489,309
• 290 victims in Massachusetts lost $8,944,041
• 41 victims in New Hampshire lost $2,576,210
• 42 victims in Rhode Island lost $1,414,709

The actual losses are most likely much higher because many people are hesitant to report they were scammed. Within the FBI Boston Division’s area of responsibility, several incidents have been reported in recent months.

Protect Against Title or Deed Fraud

• Do not take out a loan, a reverse mortgage or transfer property unless trusted family members and friends agree that it should be done and they witness the proposed transaction.
• If you receive a letter from a mortgage company notifying you of a mortgage on your home for which you never applied, immediately call the Los Angeles County Department of Consumer and Business Affairs Real Estate Fraud Hotline at (800) 973-3370. Also, notify the mortgage company that you did not apply for the loan.
• Never sign anything without being sure you know the full consequences of what you are signing. If you have any doubts, discuss them with someone you trust.
• Do not give personal information, such as your Social Security number, to a stranger or loan salesperson.

The bottom line? We all become vulnerable at some point. Have a will, be on your guard, and do your best to make sure your wishes are known so nobody takes your property without your informed, meaningful consent.

If you find yourself the target or victim of a title or deed scam, stop all contact immediately. And if you have already sent money, it is extremely important to report any transfer of funds to your financial institution and file a complaint with the FBI’s Internet Crime Complaint Center at ic3.gov.

Contact Tucker Benner Realty

If you suspect fraud or have any additional questions, we are here to help. Tucker Benner Realty has experienced real estate professionals who can help with questions about your title or deed to your real estate. Call or text 231-730-8781.

Marilyn Tucker