Modern Inconveniences: Remote Transactions and Deed Fraud

A CBS news outlet says online swindlers are “overwhelming county deed offices” throughout the state of  Maine. Worse, it’s left targeted title owners scrambling to recover their properties. Many are forced to take their cases to the courts for quiet title actions.

A senior FBI agent in Maine, Christopher Peavey, spoke with CBS Channel 13 reporters about the outbreak of scams.

Couple Moves to Maine, Gets Terrible Surprise

Phil and Lisa (a real couple) loved vacationing in Maine and decided to move there. They bought a valuable home in Kennebunkport. They selected their new home with painstaking care. Instead of going for a beachfront home, they picked one that’s set back and safer from potential storm surges.

But, as the reporters observed, “nothing protected the couple from the wave of fraud headed their way.”

Within their first year of holding the title to their new home, something unexpected came to light. Scam artists were spoofing state IDs and other credentials, pretending to be the deed holders. A “seller” masquerading as Phil hired professional agents, telling them he had to sell that valuable Kennebunkport parcel from a distance. The fake Phil told them his spouse was deathly ill, and they were being driven into unsustainable medical debt.

The agents weren’t born yesterday. They sprang into action — calling Phil and tipping him off to communications by the “seller” that seemed off.

The real Phil was aghast. Someone was trying to transfer his and Lisa’s property, making false claims about their personal lives. Someone had gone so far as to create false identification and claim to be Phil. Someone was trying to take away their dream home.

Quick-witted agents saved the day for the couple, but the story hasn’t ended. Recently, Phil looked up the couple’s new address, and found it listed as “for sale” at Zillow.com. Seems once scammers target someone the word is out — and the scamming snowballs.

The couple has now applied for a building permit, and they’re hoping that will help prevent any more false recordings with the county. Will it?

“Real Estate Scams Are Sweeping the Northeast,” FBI Finds

According to the CBS interview with the FBI agent, one big reason for a new wave of scams is computer tech. Swindlers are at the cutting edge of it. They’re well versed in electronic signing. Even worse, they can do fake notarizations.

Deed theft often relies on the ability to extract deed holders’ personal information from online sources. And yes, scammers are now using AI. So, for instance, they might use the real owner’s face and voice, when interacting with real estate professionals through a video screen. Perhaps they found an empty property they want the agent to list? This is how they succeed.

The FBI is taking action. It’s working with property owners, title companies, real estate brokerages, and title insurers. The FBI warns homeowners of “quitclaim deed fraud” or “home title theft” — schemes involving forged documents and manufactured deed transfers, as bad actors impersonate title agents or parties in transactions.

Swindlers often send their ill-gotten gains out of the country, making the lost value even more difficult to recover. But fast action can pay off. Boston FBI advises:

The FBI can work with our partners to try to stop wire transfers and recover the funds within the first 72 hours. We urge folks to report fraud and suspected fraud to the FBI’s Internet Crime Complaint Center at www.ic3.gov.

Are any perps actually getting caught? The FBI does catch some of these creeps, and ultimately stolen deeds are usually returned to their rightful owners. But righting the wrong of deed theft is usually a long struggle.

It’s even worse when the swindlers manage to sell the home to unsuspecting, bona fide buyers. That just adds to these criminal deed transfers — with more transfers and more victims.

A Proposed Bill Could Set Up a Maine Fraud Commission

Here’s a fact list covering just four recent years — 2019 through 2023 — courtesy of the FBI’s Boston Division, which handles real estate fraud in Maine, and also Massachusetts, New Hampshire, and Rhode Island.

• 58,141 victims reported losses amounting to $1.3 billion in real estate fraud.

• Maine deed holders lost property in 262 reported cases. In New Hampshire, there were 239 reported cases of real estate fraud, and Rhode Islanders also made more than 200 reports.

• Massachusetts deed holders lost $46,269,818 worth of property in 1,576 reported property fraud cases.

As of this year, Maine lawmakers are considering new legislation to get ahead of these scams. Their idea is to establish a new commission to deal with the title pirates.  The commission would complete a report by December 2025, to include:

• Recommendations for spreading awareness and guidance for preventing deed fraud.

• Ideas for lawmaking to strengthen identity verification in deed transactions, and possible penalties and remedies.

This is not the first time Maine legislators have tried to address the issue. This time, with all the attention on fraud in the northeastern region, they just might succeed. 

Protect the Deeds! Here Are the Actions Agents and Deed Holders Can Take.

The CBS13 investigative reporting team has been looking at deed theft in Maine for months. Now, it’s sharing law enforcement tips with deed holders.

First, the team says, be proactive. The FBI warns people off of buying land remotely if at all possible. Sell locally, with an agent.

Real estate agents can prevent fraud by:

• Asking for papers (like utility bills) that only the seller would have.

• Send a certified letter to the property tax address.

• Check on phone numbers; call the notary to be sure that person really did place their seal on documents.

Agents point to the Forewarn app as an example of a helpful verification tool.

Precautions deed holders can take include:

• Setting a search engine alert for their address, to look out for any publicly recorded claims.

• Registering the home email address on the county’s website for notifications of any claims against the deed. (Many counties offer these alerts, which can help deed holders contact law enforcement quickly in case of deed fraud.)

• Checking in on (or asking someone in the area to look in on) any remotely owned property.

• Keeping track of water and sewer bills, as well as property tax bills. If they stop coming or change sharply in price, a homeowner should understand what’s going on.

• Reporting suspected fraud to law enforcement — the sooner the better.

You can do some of these things beginning today. Whether the property is in Maine or somewhere else, whether you live in the home or own it from a distance, it’s wise to keep tabs on the deed.