Elders and Real Estate Fraud: A Burgeoning Problem

Evelio and Milagros Esteban are in their 70s and they’ve been homeowners for years. But recently they ran into trouble paying their mortgage. That was when they mistakenly transferred their home deed to another Miami resident, who offered to help them rent out their home. Thinking they were signing a Section 8 housing application — which would help them rent out space affordably to low-income people — they in fact signed a quitclaim deed.

Quitclaims have appropriate uses. They can work perfectly to convey property interests between trusted people in the right situations. Unlike a transfer by warranty deed, a quitclaim doesn’t involve a title search, so it is an efficient way to convey a home from one person to the next, without surveys, appraisers, inspectors, or agencies in the middle. But the same traits that make quitclaims convenient also make them easy to manipulate. Having recorded the quitclaim in the county records, a deceptive person can apply for loans on the property’s value, sell the house, or rent it out. The person who took advantage of Evelio and Milagros had the third option in mind.

That new owner became their landlord. Suddenly, Evelio and Milagro found themselves squeezed into a bedroom as other people started renting rooms in what used to be their house. A surreal story? Wait. It gets even worse. A quitclaim deed conveys property ownership — not the mortgage. The duped homeowners still owe the mortgage payments that created this scene in the first place.

Although they did not mean to sign their home away, Evelio and Milagros did just that. To the Economic Crimes Bureau in Miami-Dade County, it’s an all-too-common situation. Elderly homeowners especially fall into such traps, agreeing to “sign here, initial there” because they think the other person is helping them. They might even be signing a number of legitimate papers — and fail to notice that one in the stack that’s a problem.

Meanwhile, in Connecticut…

A lawyer called the police to report what seemed to be a falsely notarized quitclaim deed. The owner of the house was in a care home and had nothing to do with the notarization. The notary involved is now being investigated and could be charged in connection with the fraud. The alleged fraudster, who lived in the Fairfield County house, is free on bond until arraignment.

While scammers are drawn to quitclaim deeds for easy transfers of property, the archaic system of notarizations is yet another issue. This makes the abuse or falsification of notarial documents a major problem in real estate conveyances. By the time the instrument gets to the recorder of deeds, the fraud is usually a fait accompli. Under the law of most states, it is not the county recorder’s role to investigate documents for fraud or false signatures.    

Around the Same Time, in Wisconsin…

An Oshkosh resident who held the power of attorney for a 92-year-old care home resident was charged with wrongly taking the house from the nonagenarian, using — you guessed it — a quitclaim deed.

A power of attorney might be drafted for estate planning, along with a will. It appoints someone as an agent, so that when a person loses the ability to make legal decisions, a representative’s decision-making power can be used. As you see, the selection of the agent can backfire. The manipulator in this case knew the rightful homeowner for decades, and did landscaping work for her before she entered the care home seven years ago.

See more information on financial elder abuse from Deeds.com at Frauds, Scams, and Power of Attorney Problems.

How Can People Protect Themselves and Their Loved Ones Against Quitclaim Manipulation?

Get professional legal support before signing anything related to your homeownership. Urge your elder relatives to do the same. Granted, this advice may be useless to the homeowner who goes into cognitive decline with age. But forewarned is forearmed. Here’s what we all should do as we plan to protect ourselves and others later in life.

  • Check up on your deed. County records are available online in many localities. Put a monthly reminder in your calendar to look at your records and make sure no expected activity is recorded. Sign up for a fraud alert account if your recorder of deeds offers the feature. For example, here is Philadelphia’s fraud guard information sheet. An account is offered by the city records department free of charge.
  • Monitor the records of family members who have
    passed away, have age-related disabilities, or are in care. Open probate promptly
    in a family member passes. Keep a watch on the registry of deeds, and pay
    special attention to homes the elder or deceased person no longer occupies.
  • Organize your real estate papers (the deed, mortgage documents, insurance papers
    and so on). Store it all carefully, so if you ever need proof of ownership what
    you’ve invested in your home, you’ll be able to produce it.
  • Monitor your credit reports. Sign up for large deposit and withdrawal notices from your banks. Learn about your credit cards’ identity theft protection services.
  • Find out what’s going on if you or your loved
    ones receive unexpected utility bills or past due notices of any kind. They
    could be signs of someone tampering with your identity.

Finally, to the extent possible, speak with your loved ones openly about your wishes and expectations surrounding your property should you become unable to explain those wishes. Those diagnosed with conditions impacting their physical or cognitive abilities should take time to “get their affairs in order” before they become vulnerable to exploitation. It’s best to involve a real estate lawyer or financial professional who is familiar with both the state law and the person’s life circumstances. A neutral party can help predict risks and ensure a person’s goals and priorities are respected when that person becomes unable to defend them.

The bottom line? We all become vulnerable at some point. Have a will, be on your guard, and do your best to make sure your wishes are known so nobody takes your property without your informed, meaningful consent.

See more information from Deeds.com at The Quitclaim Deed and Fraudulent Real Estate Transactions.

If Someone You Know Has Fallen Prey to a Scam, What Now?

If you believe property fraud has taken place, there are a number of steps you can and should take:

  • Immediately call your township police to report
    the problem.
  • Next, notify your state district attorney’s office.
  • Call your county recorder of deeds to find out
    if you may file a fraud report or obtain resources.

If the deed has been fraudulently conveyed, you’ll need to hire a real estate lawyer. Why? Surely it should be no problem to recover a home that’s been taken by a manipulator? Not so. Once a homeowner signs a quitclaim deed, that ownership has ended. Reversing property fraud involves legal action and will require a judge’s order. In some cases, recovering a title and evicting a fraudster can amount to tens of thousands of dollars in legal bills. That doesn’t even get into the cost of fixing any damage to, or losses from, the home.

And if you are buying a home, guard against possible fraud in the chain of title. Have a title search done, and strongly consider obtaining a homeowner’s title insurance policy. Some frauds do not get discovered until after the culprit sells the house. Your home may be the most important asset you have. Protect it well.

Photo credit: Pixabay.