Title fraud has become a growing concern among real estate investors, particularly those involved in commercial properties. Eric Odum and Larry Silvestri recently discussed this issue in detail. Larry highlighted the alarming rise of fraudulent activities surrounding property titles, bringing attention to commercials promoting services like Home Title Lock, which claim to protect property owners from these scams.
The fraudulent schemes typically involve the illegitimate transfer of property ownership using a quick claim deed, which fraudsters exploit due to its low cost and minimal scrutiny. This method allows scammers to falsely transfer ownership of a property, subsequently taking out mortgages against it or selling it to unsuspecting buyers. These activities can cause significant financial harm to the original property owners, who may not discover the fraud until they attempt to sell or refinance their property.
Mechanisms of Title Fraud
Larry explained that fraudsters often use quick claim deeds to carry out their schemes. Unlike warranty deeds, quick claim deeds can be recorded with minimal fees and do not require a clear transfer of value. This makes them a preferred tool for fraudsters to illegitimately claim ownership of a property. Once the fraudster has a quick claim deed, they can use it to obtain mortgages or sell the property, leaving the legitimate owner to untangle the mess.
In many cases, the original property owner only becomes aware of the fraud when they attempt to sell or refinance their property. By this time, the fraudster may have already taken out several mortgages, leaving the rightful owner to deal with the legal and financial repercussions. This fraudulent activity is not only distressing but also costly and time-consuming to resolve.
Preventive Measures and Legal Recourse
To mitigate the risk of title fraud, property owners are encouraged to sign up for notification services offered by county clerks. These services alert owners if any documents are recorded against their property, providing an early warning of potential fraudulent activity. Larry emphasized the importance of property owners being proactive and vigilant, as early detection is key to preventing extensive damage.
Legislation is also being proposed to enhance the mechanisms for detecting and addressing title fraud. These proposed laws would require brokers, title companies, and attorneys involved in property transactions to notify county clerks of any suspicious activities. While these measures are a step in the right direction, Larry noted that property owners and professionals must remain vigilant and informed to effectively combat title fraud.
The Role of Legal and Real Estate Professionals
Larry’s experience underscores the critical role that attorneys and real estate professionals play in preventing and addressing title fraud. By conducting thorough due diligence and maintaining a high level of scrutiny in property transactions, these professionals can help identify and stop fraudulent activities before they cause significant harm. Larry also shared a personal anecdote about a fraudulent buyer who attempted to use a fake check to purchase vacant land, highlighting the importance of verifying the legitimacy of all transactions.
Eric and Larry both stressed the need for property owners to work closely with their attorneys, real estate brokers, and title agents to ensure the security of their property titles. By staying informed and taking proactive steps, commercial real estate investors can protect their investments from the growing threat of title fraud.
Title fraud is a serious issue that requires vigilance and proactive measures from property owners and real estate professionals. By signing up for notification services, conducting thorough due diligence, and staying informed about potential threats, investors can safeguard their properties from fraudulent activities. For further guidance and support, property owners are encouraged to consult with experienced real estate attorneys like Larry Silvestri, who can provide valuable insights and legal assistance in addressing this complex issue.
