What is deed fraud?

“Deed fraud,” also known as “seller impersonation fraud” or “house stealing,” has become a major problem. Recently, fraudsters, also known as "title pirates," have attempted to steal Graceland and Spelling Manor by impersonating the owner.

Recording a document with a forged signature is very simple, but normally part of a more elaborate scheme. Fraudsters have become increasingly more brazen and creative. They have been known to use fake driver’s licenses, wear disguises, break locks and change codes, deposit phony cashier’s checks, steal notary stamps, call on burner phones and spoof phone numbers, and create deceptive email accounts. As the saying goes, just because you’re paranoid doesn’t mean they’re not out to get you.

Unfortunately, as a property owner, there is not a lot that can be done to prevent this type of crime. Targets tend to be owners of raw land and vacant homes that are free and clear. So, keeping a home occupied if possible, and with at least a token mortgage, could help.

At least one company is selling a proactive solution, attaching your identity to your property by using biometrics, but it is expensive.

It could also be helpful to set up a free Google alert for your property address. That way, if a fraudster lists your property for sale, an alert may help you stop it before it happens.

But the best measure, albeit not a preventive one, is to maintain title insurance. The type of title insurance policy matters, since only the latest and best policies may cover this type of fraud. If you do not have coverage, you may still be able to purchase an endorsement. The policy gives title insurers various options when a claim is covered, but typically insurers will retain an attorney to clear title. Keep your policy in a safe place with your other important documents, so that you—and your heirs who may also be covered—can easily find and access it.

Fortunately, states are beginning to address this problem with legislation. In Arizona, a statute requires county recorders to provide a system for notifying someone when a document is recorded with their name. Homeowners can opt-in to participate and receive notices by email or text. Below is a list of the existing county opt-in sites:

Some cities and towns in Connecticut and New York have similar systems. New York City residents can sign up at: https://a836-acrissds.nyc.gov/NRD/

Additionally, some title insurers offer a monitoring service for their insureds.

Note that there are private companies that offer a similar title monitoring service for a fee, which have been investigated for deceptive advertising.

If you have been defrauded, you should file a complaint with the FBI Internet Crime Complaint Center (https://www.ic3.gov/Home/Index), make a claim on any applicable title insurance policy, and retain an attorney if your title insurer does not do so on your behalf.