Lowell Deeds

The latest on real estate recordings and new technology from the Middlesex North Registry of Deeds in Lowell

January 25, 2007

Real Estate Fraud 101

by @ 10:28 am. Filed under Real Estate

Today’s USA Today carries an interview with a convicted real estate scam artist who explains in detail how easy it was for him (and for anyone else) to execute scams involving mortgages and deeds. He used several techniques. For example, he might drive up in his Infinity Q45 Luxury car and pose as a wealthy real estate investor who owns so many properties that he is incapable of obtaining any more credit. He wants to buy a house, rent it, have the rent cover the mortgage payments and then sell the house in 18 months realizing a huge profit. All he needs is someone with clean credit to take title to the property. If you do that, he’ll split the profits with you when the house is sold. So the house is purchased with you as the buyer and the borrower. He collects the rents, never pays the mortgage, and disappears before the foreclosure sale, leaving you responsible for any deficiency. His second strategy is perhaps more worrisome. Here, he identifies a home that has no outstanding mortgage, usually one owned by an elderly person or couple. He then drafts a deed conveying the property to himself and forges the true owner’s signature. He records that fraudulent deed at the registry. A short time later, he applies for a loan. The title search discloses that he is the outright owner of the house and the loan is granted. He takes the money from the loan and disappears. Eventually, the bank begins sending out foreclosure notices but these are all thrown away. The first time the true homeowner (and actual occupant) of the house learns something is amiss is when the auctioneer shows up to sell the house. Unfortunately, these scenarios are not as fanciful or farfetched as we might hope. The law of document recording allows anyone to record a document for anyone else. When someone presents a deed at the registry for recording, we have no duty (and no way) to verify that the deed was in fact signed by the buyer or that the buyer is even aware of the transaction. The system assumes that anyone acts in good faith. It does not prevent anyone from acting otherwise; it just provides for harsh punishment if they get caught.

[powered by WordPress.]

Pages:

Recent Posts:

categories:

search blog:

archives:

January 2007
M T W T F S S
« Dec   Feb »
1234567
891011121314
15161718192021
22232425262728
293031  

Metatasks:

21 queries. 0.408 seconds