Preventing Property Fraud
May 06, 2021 by
Imagine living in the house you always dreamed of, in a safe neighborhood with top-rated schools, a great library, and a location that offers an easy commute to the office. You are always on top of mortgage payments and have never missed one. What a surprise, then, to one day receive notice from a lender that your property is under foreclosure due to missed payments. This is a type of real estate fraud that impacts thousands of homeowners every year.
According to the FBI’s 2020 Internet Crime Report, real estate fraud was among the top crimes in 2020 by victim count, resulting in more than $213,196,082 in losses. It’s one of the fastest rising white-collar crimes and occurs when a property’s title is obtained through a fraudulent transfer document.
How does it work? A criminal actor can forge a transfer deed and register it with the county under his or her name. Recording offices, through normal processes, record a discharge on the existing mortgage. That clear title can then be used to borrow money against your property. Of course, the thief never makes payments on the new mortgage, which can quickly lead to the property’s foreclosure.
That scenario puts recording offices in the mix. These essential offices record, retain, and make property documents accessible to the public. What they do not do is require proof that recording requests are valid or accurate. If a document is properly filed and all fees are paid, the document becomes part of the permanent record.
Recording offices can, however, offer and benefit from fraud detection services to protect their constituents. Online fraud detection services can be a seamless component of a county’s citizen self-service website. Such a service automatically informs residents when new documents are recorded using their personal or property information. These alerts come in the form of automated emails with links to the index and document for immediate access and review. Property owners can enter multiple variations and combinations of their names and parcel numbers to ensure comprehensive monitoring.
This type of automated oversight prevents property fraud and puts property owners in control with no extra lift from under-resourced recording office staff. Recording offices see benefits as well, with increased transparency and better constituent service. Enhanced self-service opportunities also drive website traffic for offices and create new revenue opportunities. In short, everyone can be at ease knowing the county has their back and is prioritizing resident security and with positive budget impact.