Forged deeds and Title Lock
Whitman, Dale
NY colleagues: We’ve been having an active discussion on the DIRT list about the above topic. Mike Siris suggested that you might find it of interest, so I have encapsulated it below. It’s a bit lengthy, but several of the posts are directly NY-relevant.
Best wishes,
Dale Whitman
Dear Dirt members,
I keep hearing ads about Home Title Lock wherein the group supposedly checks at the courthouse for filings affecting title to your property. I know you can do this yourself. However, this appears to be to me a waste of money. I have never experienced it in my dealings as an attorney. What are your experiences?
Caroline Zoes
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Some recording offices with electronic recording allow any property owner to set up a notice procedure so that if anything gets recorded against their property, they immediately receive an email. That’s a similar system but free. Both systems suffer from being after the fact. One might propose instead a system where a property owner has the ability to allow or totally block recordings, such as through a password. I think blockchain systems allow this sort of thing, but blockchain has not yet taken over the recording system. Maybe with time it will.
Joshua Stein
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And even if such a system allowed the property owner to control the recording of interests against his or her property, it would need to provide exceptions for involuntary liens, such as judgement liens and mechanics liens, that the owner didn’t want but that others had a perfect right to record. But at least such a system would put a stop to the recording of fake interests by nutty vigilante groups against the property of public officials. That has sometimes been a serious problem in some states.
Dale Whitman
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I called them about a year ago to get some detail on their service. They have a database of some kind that they run their customers against. They informed me that the database is gathered from all filings across the country. I informed them I both practice in and own real estate in counties that are not online at least in the sense they were telling me.
I asked about what their service provides if there is a filing detected on your property. They inform you. Period. There is no “army” of attorneys waiting to help you. You have to locate counsel to help clear the title. They may have provided some suggestions which probably consists of a canned email. Definitely one to avoid.
Gregg Larson
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Hi Caroline. This has been bothering me for some time. I think it’s a scam. They charge $14.99/month to protect you from someone “stealing” your home by forging the title and taking out a mortgage against it. I’m not quite sure how they “post a virtual perimeter around your home’s online title,” but it sounds like they help sort it out if something is found. I can’t say as in 30+ years of practice I’ve ever actually run across a random forged deed just filed against a property. I’m sure it happens, but what are the odds? Enough to spend $180/year on it?
Yes you could definitely check this online in many if not most jurisdictions, though I don’t know how many people would actually be sophisticated enough to do so or want to mess with doing it monthly or bi-monthly.
It has always been my understanding that any forged document is void ab initio, so someone can’t “steal” your title through a forged deed and any subsequent mortgage is similarly void. I’ve seen some discussion as to whether there should be a statute of limitations applied to the forgery, but that clearly is not in line with traditional law on forged deeds.
So, it seems that paying $15.00 a month for someone to tell you that there is an invalid forged deed on your property seems more than a little questionable.
George P. Bernhardt
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George is absolutely right. Products like “Home Title Lock” are a scam. I wrote about this last year in my article (attached here), “The Myth of Title Theft: What Providers of Protection Against It Aren’t Telling You.”
I felt compelled to write it after hearing Bill O’Reilly warn me for the umpteen-zillionth time that thieves can “steal” title to my home by forging my signature on a deed, then “mortgage” it for cash, and then “stick” me with the payments” — three complete misstatements of law, uttered rapid-fire in about five seconds.
Don’t get me wrong: Forgery of deeds is a problem, rampant in some areas, that can cause substantial financial damage to the owner. But there’s no “title theft,” and the damages are not payments to the forger’s “mortgage” lender.
-- Bill Maffucci
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I saw something but can’t remember if it was a mailing, or an email, or a TV ad. I just remember that it looked like a scam.
In addition to checking public records periodically which is free and easy to do in Florida, if someone else has recorded title, the Clerk sends information to the Property Appraiser in the applicable county, and the PAO sends name and address changes to the Tax Collector. Therefore, Florida tax bills would be sent to the “new” ownership so someone looking for those agency mailings would not get their notices and might make inquiry of their local taxing office – if they are paying attention.
Sheila M. Anderson
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I REALLY depends on where you are. Philadelphia Pa has had an epidemic of deed fraud,
https://www.inquirer.com/news/housing-theft-philadelphia-deeds-fraud-20190501.html
So much that the City government has launched special deed-fraud outreach (docs attached as .pdf
https://www.phila.gov/documents/deed-and-mortgage-fraud-resources/
The Philadelphia Dept. of Records (~Recorder of Deeds) has implemented a free notice by email system.
Hal Schirmer
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Many stories in the press on this topic seem to misunderstand the problem. In every state I’m familiar with, a forged deed is a nullity and is absolutely void ab initially. Nobody can “steal” your house by forging a deed. Even the Philly Clerk's office seems confused. Their website says:
Deed fraud occurs when a person sells a home pretending to be the owner without the permission of the legal owner. The legal owner’s name is removed from the deed without the legal owner’s knowledge or informed consent.
This is nonsense, of course. No one can remove an owner's name from a recorded deed. If an owner is victimized by a forgery, they may be put to some litigation expense to prove that the deed out is actually a forgery (although as I recall the ALTA Homeowner's policy covers this post-policy-date risk). But the real loss will likely be suffered by the hapless title insurer who insures the title of the BFP who buys from the forger.
Dale Whitman
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It really depends on how quickly you can flip and leave.
Philadelphia Inquirer, May 1, 2019 - After a mass theft of Philly houses, foreign nationals flee the country, DA says
“After allegedly stealing nearly two dozen properties in Philadelphia, three foreign nationals appear to have fled the country with their profits, the Philadelphia District Attorney’s Office says. …Of the 21 properties, 13 were resold for a total of at least $470,000, city real estate records show.”
https://www.inquirer.com/news/housing-theft-philadelphia-deeds-fraud-20190501.html
Hal Shirmer
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Dale, the term “stolen” houses has come about to explain to the ordinary person the phenomenon of fraudulent deeds, it is not meant to be a legal term. The notification program by the Philadelphia department of records does not require anyone to sign up, it is automatic whenever a deed is recorded and simply gives notice that the deed has been recorded, so that if that was not intended by the grantor, the grantor may take action. This program was instituted years ago as the only means to try to cope with the phenomenon of forged deeds being recorded. The department could not reject a deed that otherwise met the statutory requirements for recording. There is no means of checking the authenticity of signatures.
Miriam Jacobson
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There’s a practice guide book by an attorney whose dad worked in insurance for his whole career; he said that his Dad’s common saying was “Insurance companies want to insure anvils at the bottom of the ocean against fire loss.”
Someone is apparently promoting this nonsense out in Oregon right now, as I have had a couple of people ask about it.
I think this “title lock” nonsense is right up there with the “water supply line” insurance policies that some huge outfit promotes heavily to widows and others — it’s about $.000002 of Insurance value offered for some hideous premium, plus I bet you get inundated with other scammy pseudo-insurance offers if you bite on that one. (It insures against pipe break between your water meter and your inside plumbing.)
John Gear
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Dale - In Philadelphia it really can mean that you lose your property - in a practical sense. Unfortunately this happens in low income areas and owners just don’t have the money to fight it. It’s rampant here and the fraudsters look for vulnerable properties - vacant, estates and properties where a new deed was never recorded after a death. We have fake notaries and willing title companies, and none of this is “policed” by anyone. A lot don’t use title insurance here as well. We are a real do-it-yourself state.
Not to mention all the fun we have here with King Charles II’s land grant to William Penn.
Gail Marcus
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Professor Whitman and all,
This all makes me think back to the Law and Order episode (Identity, which aired on November 5, 2003), in which an 80 year old man was accused of murdering a man who stole his identity and fraudulently sold his home and booted him out of the home. Obviously if he had been aware of all of this discussion, he wouldn’t have had to commit murder! Just another reason for the value of this listserv.
David Ambrose
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The New York City Department of Finance also provides a free notification service:
The ACRIS Notice of Recorded Document System is a registration program that is intended to provide notice to property owners when deeds, mortgages and deed- or mortgage related documents affecting an ownership interest in real property, have been recorded against a single property in the five boroughs of New York City. In addition to property owners and their agents (including child, spouse or domestic partner of owner if they are a designee), the managing agent, the property owner’s attorney, the lienor, or executors/administrators of the estate of the owner or lienor of the property may register under this program. Owners of cooperative apartments and timeshare units may NOT want to register for notification as these properties do not have unique borough, block and lot identifiers and the registrant would receive notifications affecting the entire building rather than for the particular unit of interest.
https://a836-acrissds.nyc.gov/NRD/
Michael Slive
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Nassau and Suffolk Counties have a free notification service as well:
https://i2a.uslandrecords.com/NY/Nassau_PFA/
https://suffolkcountyny.gov/Elected-Officials/County-Clerk/Home-Owners-Watch-List-HOWL
Michael Haltman
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No one is suggesting that deed and mortgage forgery isn’t a problem. But the problem isn’t “title theft” or any ability of the thief to “mortgage” the property, “steal the equity,” and “stick the owner with the payments.” None of those things happen.
Instead the problem is that most victims of the crime must hire an attorney to prove that the deed was forged and to untangle the title. That cost can be prohibitive, and services like Home Title Lock do not cover it.
The press isn’t helping. When the first installment of the Philadelphia Inquirer’s “Stealing from the Dead” series, I submitted (and the paper published) the attached letter the editor, commending the author for calling attention to the problem but correcting his characterization of the problem as title “theft.” No matter; he made the same mistake throughout the rest of the series.
-- Bill Maffucci
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In California, we have an expedited process to quiet title in the context of a criminal proceeding without the expense of a civil action! When borrowers or other parties are subject to criminal prosecution for a felony if (before or after a foreclosure) they engage in fraud, deception, or unfair dealing, criminal charges can be filed. For many years, California Penal Code §115 has made it a felony for anyone to knowingly procure or offer any false or forged document to be filed, registered, or recorded in any public office in California that (if it were genuine) could be filed, registered, or recorded in such office. Pen C §115(a); see People ex rel Harris v Aguayo (2017) 11 CA5th 1150 (complex real estate scam through which defendants illegally acquired and rented out distressed real estate belonging to others). After the conviction of a person for procuring the filing or recordation of a false or forged document, Pen C §115(e) allows the prosecuting agency (i.e., the city attorney, district attorney, or California Attorney General) to file an expedited motion in the criminal court for an order declaring the document to be void ab initio without a quiet title judgment from a civil court. See People v Astorga-Lider (2019) 35 CA5th 646, 652 (parties to sale agreement believed deed of trust they signed was document for cash purchase of real property, and they had no intention of encumbering property; thus, deed of trust was declared void as forgery).
There are numerous examples of California and federal criminal statutes that might benefit lenders or other interested parties in forgery cases; some provide restitution remedies:
Penal Code §115 (knowingly procuring or offering any false or forged instrument to be filed, registered, or recorded in any public office in California; see §§2.9, 2.34, 2.129B of the CEB mortgages & deeds of trust litigation book).
Penal Code §502.5 (borrower intentionally harming foreclosing lender by removing or disposing of certain specified items from real property security).
Penal Code §602.9 (rent skimming by claiming ownership or taking possession of residential dwelling, without owner’s consent, for purpose of renting dwelling to another; see §6.13, CEB book).
Title 18 USC §1028A (defrauding mortgage lenders by use of identity theft; see U.S. v Lindsey (9th Cir 2017) 680 Fed Appx 563 (unpublished opinion)).
Title 18 USC §1343 (defrauding purchasers of residential property or mortgage lenders by use of wire, radio, or television; see U.S. v Lindsey, supra (evidence suggesting that lenders negligently or intentionally disregarded defendant’s misrepresentations when reviewing his loan applications was inadmissible)).
Title 18 USC §1344 (defrauding federally insured bank).
Title 18 USC §1001 (making false representations about material facts to U.S. Department of Housing and Urban Development).
Under the Mandatory Victim Restitution Act (MVRA) (18 USC §3663A), restitution is required in any case involving a criminal offense against property under Title 18, including any offense committed by fraud or deceit. 18 USC §3663A(c)(1)(A)(ii). Lenders and loan purchasers are entitled to restitution under the MVRA, and the Supreme Court in Robers v U.S. (2014) 572 US 639, 134 S Ct 1854, held that the sentencing court must reduce the restitution amount by the amount the victim received in selling the collateral, not the value of the collateral when the victim first received it. But the courts of appeal continue to disagree on other aspects of the formula for calculating the amount of restitution. See, e.g., U.S. v Ritchie (4th Cir 2017) 858 F3d 201 (discussing split).
Bonnie Maly
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We had a client with a similar problem. He was stationed overseas and his rental property went vacant for a short while. A scammer advertised it for foreclosure sale. Luckily he returned and a neighbor notified him of the newspaper ad. He frantically hired a lawyer to stop the sale (at his own expense as he had declined Owner's coverage).
Turns out the scam was not over the house title, but the deposit at the foreclosure sale. The scammer intended to collect the deposit and run. Once they realized the owner was on to them, they disappeared.
Craig Buck
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Can't these guys get real jobs instead of victimizing good people?
Susan M. Pesner
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I’m interested in whether the ALTA Homeowner’s Policy would cover the cost of a quiet title action or a declaratory judgment action to have a forged deed declared void. I reviewed the policy, but couldn’t find any precise language on the point. However, Covered Risk no. 29 is “Your Title is unmarketable, which allows someone else to refuse to perform a contract to purchase the Land, lease it or make a Mortgage loan on it.”
Certainly the existence in the public records of a forged deed is likely to make the owner’s title unmarketable, at least until it is removed or declared void. Title insurance mavens, what do you think. Would this language result in coverage against a forged deed, executed and recorded after the policy date?
By the way, I fully realize that in eastern states like Pennsylvania, many home purchasers may not get the ALTA Homeowner’s Policy, or perhaps any owner’s title insurance at all. In nearly all western states, it’s customary for the seller to pay for an owner’s policy for the new purchaser (although it may not be the ALTA Homeowner’s Policy, which contains many protections not found in a standard owner’s policy).
Dale Whitman
Glatthaar, Tom
New York just adopted a statute that requires the county clerks/recorder’s offices to send written notice to an homeowner/grantor any time a deed or mortgage is recorded against their property. Recording fees were increased to cover the cost.
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- Monitoring & Alerts: We monitor the title of your property 24/7. When new documents are recorded that affect your property value or ownership we will alert you of the change.
- Guidance & Documents in the Case of Fraud: If potential fraud does occur, you are not alone, our team of experts are here to help you navigate the situation. Filing the Affidavit & Notice of False Filing will alert industry professionals that there is potential fraud.
- Comprehensive Title Report - FREE: We provide a free title history report (a $100 value) with sign up, which allows you to see past activity on your property and learn if you’re already a victim of title fraud.
From: Whitman, Dale <Whit...@missouri.edu>
To: 'nyclar...@googlegroups.com' <nyclar...@googlegroups.com>
Sent: Mon, Jun 8, 2020 11:36 am
Subject: [nyclarealprop] Forged deeds and Title Lock
Michael Berey
Jonathan Richards
I’m glad the “Title Lock” scam has hit the blog radar. Some of you may recall years ago there was a service advertised where you could obtain a copy of your deed for a cost far in excess of the cost from the county recorder. I believe this scam was eventually shut down in NY.
The Title Lock advertising, which incidentally I first heard down here in Florida on internet radio during a commercial break on CNN, makes several fraudulent statements. We need to bring these misrepresentations or false implications, i.e. that a forged deed or mortgage can create a valid title or lien for which the true owner becomes responsible, to the attention of state attorneys general and consumer protection agencies. The FTC should also be interested.
In my 48 years in the title insurance industry with many of those spent in claims as well as underwriting I found that most deed and mortgage frauds were family frauds, a spouse, child or other relative; or by the caregiver for an elderly owner sometimes under a forged or fraudulent power of attorney. I did not see wholesale title theft even in the bad days of the 1980s. We also saw a lot under foreclosure rescue schemes under powers of attorney the owner did not, did not know or realized they had executed. I have war stories such as the husband and girlfriend or the wife, while her husband was in prison, but I won’t elaborate.
Title insurance, not the so called Title Lock, is the best protection for present and subsequent purchasers. The basic ALTA policy protects the subsequent purchaser in good faith. The NY TIRSA Owner’s Extended Protection Policy for (residential 1-4 family) properties also covers post policy forgeries and frauds as does the 2013 ALTA residential Owners (1-4 family) form. I’m forwarding a copy of this response to my contact at ALTA.
Jonathan Richards
Attorney at Law (Ret)
Admitted in New York