Deed Theft and Foreclosure Rescue Scams

Real estate fraud is on the rise. One report released by CertifID, a wire fraud protection company, found that one in 10 Americans have been targeted for real estate fraud, with one in 20 suffering losses. Perhaps most alarmingly, the demographic most at risk of financial exploitation — those aged 65 and older — are the least informed about real estate fraud, with 63% reporting that they were only somewhat aware or not at all aware of the risks. Deed theft scams and foreclosure rescue scams are two forms of real estate fraud that have become increasingly common in recent years and, like all forms of financial elder abuse, can have devastating long-term consequences. Our California financial elder abuse attorneys can help the victims of these scams seek justice. 

Deed Theft Scams 

The idea of someone stealing real estate the way they would steal money might sound outlandish, but it is no laughing matter. While it is physically impossible to carry off a person’s house, deed theft allows scammers to accomplish the legal equivalent.

How Deed Theft Scams Occur 

In the simplest terms, deed theft occurs when the perpetrator forges a deed for the purpose of stealing the real estate covered by the deed.  We have also seen cases where someone has a senior without the capacity to sign a deed when they have no idea what they are signing. There are several ways for scammers to accomplish this, including: 

• Creating fake documents to transfer ownership: Occurs where the perpetrator uses publicly available property databases to forge deeds or have a senior lacking capacity to sign a deed that purport to transfer the subject property to themselves or a third party. 
• Committing identity theft: If scammers know their target’s personal identifying information (e.g., birth date, Social Security Number, etc.), they can refinance the home or take out a reverse mortgage to obtain the home’s equity. 
• Impersonating loan officers: Occurs where the perpetrator poses as a loan officer to induce the target to refinance their home or modify their home loan, when in reality, the target is signing over their home to the scammer 

The perpetrators of deed theft typically target individuals who have significant equity in their homes, which is a demographic that is more likely to include the elderly. 

Steps You Can Take to Prevent Deed Theft Scams

The easiest and most effective way to prevent deed theft scams is to keep an eye on your property’s deed. This information is easily accessible through your local county recorder of deeds (for example, real estate records for the City and County of San Francisco can be found at the Office of the Assessor-Recorder). Some counties allow property owners to set up notifications to alert them if there are any changes to the documents recorded on the property. Another good option is to purchase a title insurance policy. Many title insurance policies now offer coverage in the event that someone else claims to have rights in the policyholder’s property due to forgery or impersonation. 

Foreclosure Rescue Scams

Foreclosure rescue scams are a particularly diabolical form of real estate fraud in which scammers target homeowners who are in foreclosure or default, offering to “rescue” them from their financial woes, only to steal the deed and/or equity in their home. 

How Foreclosure Rescue Scams Work 

When a homeowner’s property enters foreclosure, their lender files a notice of foreclosure in the local county clerk’s office. The county clerk then publishes a list of all recorded foreclosures in the area. Scammers take advantage of this public information to contact the owners of the homes being foreclosed upon with offers to help them “save their home.” 

Most foreclosure rescue scams fall into one of a few categories, including: 

• Repurchase/lease-back scams: Occur when the scammer convinces the homeowner to sign over the deed to a third party with good credit who can obtain new financing, promising that the homeowner can remain in the home and make lease payments until they can buy it back in the future. Once the deal is completed, the scammer evicts the homeowner. 
• Bait and switch scams: Occur when the scammer informs the homeowner that they are signing new loan documents to obtain better terms. Hidden amongst the paperwork is a deed, which transfers the property to the scammer. 
• Phantom help scams: Occur when the scammer poses as a “professional” who can help the homeowner avoid foreclosure or qualify for a refinance, often making grandiose claims about their abilities. The scammer charges exorbitant fees for these “services” and then disappears.  

Remember, if a deal sounds too good to be true, it probably is. If you or someone you care about has been swindled by such a deal, you should consider speaking to a California financial elder abuse attorney who can help you recover. 

How to Avoid Becoming the Victim of a Foreclosure Rescue Scam

A good rule of thumb to avoid becoming the victim of a foreclosure rescue scam is to be wary of anyone who contacts you (other than your current mortgage lender) offering to save your home. The California Department of Justice recommends the following tips to avoid foreclosure rescue scams: 

• Do not pay upfront fees; foreclosure consultants cannot legally collect fees before rendering services. 
• Do not ignore letters from your lender or loan servicer
• Do not transfer title or sell your house to anyone who claims to be a foreclosure rescuer or agree to lease it back from a third party 
• Do not pay your mortgage payments to anyone other than your current lender or loan servicer
• Do not sign any documents without reading them first; you may inadvertently sign a document that transfers ownership of your property

Real estate transaction documents can be complex, but a San Francisco financial elder abuse attorney can help you decipher them. While we do not handle foreclosure cases, we can refer you to someone who can represent you.

A San Francisco Financial Elder Abuse Attorney Can Help the Victims of Deed Theft and Foreclosure Rescue Scams Recover 

Deed theft and foreclosure rescue scams are among the most serious forms of financial elder abuse, as they can result in the loss of the victim’s home. For more information about recovering from deed theft and foreclosure rescue scams, please contact a California financial elder abuse attorney at the Evans Law Firm, Inc., by using our online contact form or calling 415-441-8669 or toll-free at 1-888-50EVANS (888-503-8267).