We all know about porch pirates… but look out for title pirates. They’ll take your whole porch.
Title piracy is deed fraud. It happens when someone uses a deed to deliberately take over someone else’s real estate. It’s an unusual crime, but according to the National Association of REALTORS® (which cites FBI figures), it’s been on the rise since the pandemic hit.
What’s the Origin of “Title Pirates”?
Real estate attorney Victor Petrescu is a partner at the firm of Levine, Kellogg, Lehman, Schneider & Grossman LLP. Petrescu talks about the prevalence of real estate closing scammers. Interviewed by REALTOR® Magazine, Petrescu called them pirates.
Their top swashbuckling moves? Impersonating homeowners. Recording fake deeds and debts. Corrupting home sales.
Title pirates often deal in deed forgery for profit. Your typical title pirate is handy with fake IDs and won’t hesitate to masquerade as a legitimate homeowner.
They send messages, pretending to be escrow agents so people will wire funds to them. They sell the homes they control to cash buyers.
Some title pirates rent out or borrow against the properties. Some get approved for construction loans. Then, instead of using the funds to get the work done, they might just take off with the money. The swindler will leave an unsuspecting lender struggling to foreclose on a property that’s now embroiled in a fraud case.
Whose Homes Get Pirated the Most?
Empty homes, elders’ homes…
The title pirates, drunk on their own cleverness, like to loot and pillage the homes no one currently occupies. An owner of an empty home could be distant, retired — maybe in a nursing home.
An unwatched home can be an easy treasure chest.
Mortgage-free homes can also be easy picks for fraudsters. Charlie Lee, director of legal affairs for the National Association of REALTORS®, says con artists scour the public records to find clear titles. When they sell the homes, the pirates often take advantage of still more people — unaware buyers.
We can all remind the seniors we know to check in on their county property records. Where available, we can help them set up automatic activity alerts. Many counties alert residents of activity on their deeds at no charge. Automatic messages tell owners when a lien or deed is filed against their property. This means they’ll know when a lien lands on their title or someone has conveyed a deed.
People who report suspicious activity promptly are the most likely to recover the titles to their homes. So, our concern could actually save our loved ones’ titles.
Take a look: You can help keep seniors safe from deed theft.
Targeting Elders? Scallywags!
A number of recent title piracy exploits have occurred in Tennessee. In a typical case late last year, a caregiver at a Memphis elder care site is suspected of taking a patient’s title, by forging and filing a quitclaim deed. She got herself named as having power of attorney, and control over the patient’s bank account. She’d been working for the patient for about a year when she created a quitclaim for the title to his longtime home. She had the quitclaim notarized and recorded.
Just a few weeks ago, police apprehended a different Tennessee deed filer and a notary over a similar misdeed (no pun intended). The target was in hospice care, living in an elder care setting, out of state. Someone had totally cleaned out the home. And it took going into probate court for a lawyer to recover the title. The court voided the sneaky quitclaim deed and put a relative in charge of the patient’s affairs.
Quitclaim deeds are easily created. Once a quitclaim is filed, that’s that. Quitclaims can’t just be deleted from the records because someone was wronged.
Traditionally, deed recorders’ offices do not check the legitimacy of deeds — although there’s a movement afoot to enable county officials to verify documents. That could help keep falsified documents out of the system. It could also spare victims and their heirs from expensive struggles to recover their stolen assets through the courts.
So, What’s Covid Got to Do With All of This?
The onset of a pandemic in 2020 closed offices across the country and worldwide. (We observed the impact on deed recorders at the time.)
Most offices had to embark on a learning curve to get into the remote/hybrid groove. Opportunists took advantage of that learning curve. They knew people were moving equipment in and out of offices, dealing with confused clients, and learning how to set up security tools remotely. Unfamiliar vendors arrived, as offices grappled with new challenges. Deceptively realistic texts and emails abounded.
Day by day, standard procedures that caved under pressure were replaced. Often, that involved adopting advanced software, boosted by artificial intelligence.
Today, businesses of all sizes acknowledge the importance of cutting-edge property tech. Some have had to deal with new compliance challenges in the wake of 2020, and many had to innovate.
Continued innovation in property tech might turn title fraud into a thing of the past. But we’re not there yet.
Banish the Title Pirates! We Can All Do Our Bit
Let’s keep the high seas of real estate interactions safe. Buyers, be aware of the potential for wire fraud. Did something change in the wire transfer instructions? Did someone initiate communications, and you’re not exactly sure if you’ve talked before? Don’t press links. And only go ahead and make the transfer after an extra call to verify the person at the other end.
Real estate professionals at the closing table can check the identities and powers of the other parties. Of course, agents should exercise special caution around remote transactions.
Some home buyers only want to close in the presence of the seller. They cannot feel comfortable without shaking the other party’s hand. And some owner impersonators will only agree to dealmaking from afar. Good agents are always on guard for red flags.
Real estate pros need to have absolute confidence in the notary. Title pirates have been known to impersonate notaries. A title company can put legitimate notary public services in place for a closing.
Four years after the pandemic struck, remote technology is standard. Increasingly, transactions happen online. If you’re involved in one of these transactions, be sure to use an approved remote online notary. Don’t let the pirates sink your goals.
Supporting References
Jessica Gertler for WREG News Channel 3 Memphis (published by Nexstar Media Inc.) via WREG.com: Property Fraud Keeps Happening. What’s Being Done to Stop It? (updated Jan. 19, 2024).
Melissa Dittman Tracey for REALTOR® Magazine, from the National Association of REALTORS®: Beware of “Title Pirates” Wreaking Havoc on Closings (Oct. 9, 2023).
Melissa Dittman Tracey for REALTOR® Magazine, from the National Association of REALTORS®: Scammers Are Plotting to Sell Vacant Land Fraudulently (Oct. 23, 2023).
Brenton Steenkamp Partner, Ernst & Young Global Ltd., Forensic & Integrity Services, via EY.com: Why Covid-19 Made Fraud and Compliance a Bigger Issue (Apr. 5, 2021, citing a global ACFE survey).
Old Republic Title Blog via OldRepublicTitle.com: Covid-19 and Wire Fraud.
And as linked.
More on topics: Title insurance, Title forgery in Florida
Photo credits: Public domain CC0, via RawPixels; and Vika Glitter, via Pexels/Canva.