What Is Deed Fraud and How You Can Protect Yourself

Deed fraud, also known as deed theft or house stealing, is a type of real estate fraud where scammers use fake IDs, forged signatures, and fraudulent paperwork filed with county offices to steal someone's property. It is a growing problem, particularly in areas with high property values and where homes may be vacant or owned by elderly residents.

How Deed Fraud Works

The basic mechanism is simple: a scammer forges a deed transferring the property from the real owner to the scammer or a shell company. They then file this fraudulent deed with the county recorder's office. If the forgery is not detected, the scammer now has apparent legal ownership and can sell the property, take out loans against it, or rent it out.

Common Schemes

Illegal house-flipping: Criminals purchase or steal a home, make minor improvements, and resell it for much more than it is worth. The buyer may not discover the fraud until they try to obtain clear title.

The straw-man scheme: A scammer obtains a mortgage using a "straw man's" credit history, then gets the straw man to sign over the deed. The straw man is often a willing participant who does not fully understand the legal consequences.

Foreclosure rescue scams: Scammers target homeowners facing foreclosure, offering to transfer the deed as a supposed solution. The homeowner signs over the deed thinking they are saving their home, but the scammer now owns the property and may evict the former owner.

Vacant Properties Are Especially Vulnerable

Properties that sit vacant, as many probate properties do, are prime targets for deed fraud. The owner is deceased, the heirs may not be monitoring the property closely, and the scammer can operate without anyone noticing for months or even years.

How to Protect Yourself

The FBI recommends staying vigilant by regularly checking records at the county deeds office. All property and business records stored there are public information. By monitoring these records, you can spot and report suspicious activity early. Consider setting up alerts if your county offers them, and act immediately if you see any unauthorized transfer.

For estate properties, the personal representative should verify that the deed is clear and that no unauthorized transfers have occurred. This is especially important for properties that have been vacant for an extended period.

If you are managing an estate property and want to verify its title status, or if you suspect deed fraud has occurred, reach out for guidance. Marc Cormier can connect you with the right legal and title professionals to address the situation.