A former career in advertising for local television news affiliates shaped the wary consumer in me. The media exaggerate crises, and thanks to internet data breaches, entire industries have evolved from fearmongering. Naturally, I cringe at the frantic commercials warning me about lurking online crooks who may transfer my home to themselves and then mortgage or sell it without my knowledge. Heavens, they may have done so already!
An increasing number of troubling new stories in the state of Arizona, warnings from the Arizona Attorney General, and a real estate continuing education course convinced me that this pernicious form of fraud is indeed a very real issue and, although rare, appears to be on the rise.
Among the more memorable of my continuing education classes was attorney Jesi Wolnik’s AZDRE class, “Dirty Deeds and they’re not Dirt Cheap.” Aside from the catchy course title, I was intrigued by the idea that some nefarious person could steal my greatest asset not at gunpoint, but seemingly with the stroke of a pen.
A real estate specialist attorney with the Phoenix law firm Davis, Miles, McGuire, Gardner and a former licensed real estate broker, Jesi Wolnik is frequently sought out by law enforcement, the legal and real estate communities and the news media for her knowledge and expertise in dealing with deed fraud cases. Wolnik, who personally handled 10 deed fraud cases in Arizona the previous year, provided insight into the crime, its detection and resolution.
No Good Deeds Done
by These FraudstersThe sad deed theft of Debi Gottlieb’s father’s Scottsdale home was covered by KPHO Channel 5 News in Phoenix in May 2022. After his death in 2018, Ms. Gottlieb, a licensed realtor, was shocked to discover her father’s home listed for sale in the Phoenix MLS, with another individual recorded as the owner, and listing photos showing the house stripped of all her father’s possessions.
After contacting the realtor who sold it to Zillow, Ms. Gottlieb called the police and was advised to stay out of the house. Although the attorney Gottlieb hired ultimately prevailed in returning her father’s property back to Debi’s hands, the process was difficult, requiring a demand letter and, devastatingly, no hope of recovering all the family mementos, medals, awards and photos.
Meanwhile, Scottdale Police tracked down the thief and determined how he carried out his crime. Fortunately for police, the Californian who claimed Debi’s father’s identity, presented himself to California notaries, who collected fingerprints in accordance with state requirements—which currently don’t exist in Arizona. Incredibly, the 30-year-old thief was able to impersonate a deceased 84-year-old, despite the fact that the forged ID stated he was born in 1988, 10 years after Debi’s father had purchased the home. Ms. Gottlieb believes if the perpetrator had signed in Arizona instead, he’d likely have gotten away.
In another intriguing case, Ms. Wolnik represented a Phoenix area home flipper whose investment property was stolen. Remarkably, by the time he discovered the deed was not in his name, the house had already been sold four times within 48 hours, with buyer number four having purchased it at $240,000. It was determined that the fraudster, who originally sold the property to buyer number one for $95,000, did so in the name of a trust with a UPS business address and also recorded fraudulent deeds on a half-dozen other Phoenix-area homes.
Who is Most Likely
to be a Home Thief?According to Wolnik, the press focuses on more dramatic tales of criminals and paper terrorists lurking behind computers. Sadly, the thief is far more likely to be somebody close to the victimized property owner, who is frequently elderly or vulnerable. Wolik provided startling local title company statistics: just 10 percent of deed fraud is perpetrated by strangers. People familiar to the victim do the remaining 90 percent, including 44 percent sons and daughter, 15 percent other relatives and 31 percent caregivers or trusted acquittances.
How Does Deed
Theft Happen?First, the thief illegally obtains ownership of the home by forging and recording a deed, often with the help of an unscrupulous notary. This forged deed effectively transfers the home into the thief’s name, or an assumed identity. The problem is that no one validates the deeds filed with the county recorder. “The recorders don’t want to be the arbiter for determining whether a document is valid or not. With the amount of documents that come in, there’s not a whole lot they can do,” explains Don Carroll, Arizona AGO Special Investigator. “The pandemic led to greater criminal activity as procedures done in person are now done virtually. The forger may sign as the actual property owner or personal representative and convey title to him/herself.”
Next, the thief enters into a contract to sell the property to an unsuspecting buyer. Property thieves may find a buyer posing as a for-sale by-owner seller, with some bold enough to list the property on the MLS. Once a buyer is found, escrow is usually opened with a title company. Although the title company reviews the chain of title, the forged deed typically does not raise any red flags because it appears to have been legitimately signed and recorded.
Once escrow closes, the thief absconds with the funds, while the true owner loses their house and equity. Victims of deed fraud can lose everything if they don’t act quickly.
What Are Some of
the Risk Factors?Unoccupied (vacation & second homes), abandoned, or distressed homes, lots or businesses as well as rentals owned by corporations or people who live out of state.
Homes owned by recently deceased owner. Criminals monitor death notices and act quickly to forge the decedent’s name on the deed and fraudulently recording it and renting or selling the property.
Senior citizens, immigrants and those facing foreclosure. These groups are targeted by scammers (oftentimes a relative or a caretaker) who bully or deceive them into signing away their rights. Beyond fraud and theft, these crimes incur additional penalties for elder abuse.
How to Protect Yourself and Your NeighborsBeware of unethical (but sometimes legitimate) companies that demand expensive fees for deed title searches, or scammers posing as government officials with official-looking invoices for services related to fictious deeds. There are various free or low-cost ways to monitor one’s property records and reduce fraud risk.
Check Your Records Periodically.—Go to acclaim.pinalcountyaz.gov/acclaimweb to search official documents related to your name and property address.
Enroll in the Pinal County Recording Notification Service. — Pinal County Recorder Dana Lewis narrates a video online at pinal.gov/810/recorder that provides an easy four-step guide to register the Recorder Notification Service to help protect yourself and your assets. This free, opt-in-only service alerts users by email if an official document has been recorded in their name.
Beware of Suspicious Paperwork. — If you receive information from a mortgage or title company you don’t recognize—whether your name is on it or not—open it and contact the sender to verify. Consider keeping one email account for home-related business and do not have utility bills and other documents sent to your vacant property address.
Report Suspected Abuse, Neglect or Exploitation AZ Adult Protective Services.—Call 877-SOS-ADULT (767-2385) to reach the Adult Protective Services (APS) Hotline if you feel a relative, friend or neighbor is being exploited. You may file a confidential report with APS and they will investigate.
Additional Way of Avoiding Deed Fraud.—Be advised to consult with an attorney before proceeding with any of the following suggestions: Because a lender poses a barrier to a would-be perpetrator, some attorneys advise that a homeowner who owns their property outright consider purchasing a title insurance policy from a reputable, local title company to protect against future events or placing a small encumbrance on a paid-for property. Also, consider arranging for a durable power of attorney for ageing, potentially vulnerable relatives.
How to Undo Deed FraudDeed fraud may be simple to conduct, but it may take time, frustration and costly litigation to remedy for both the legitimate homeowner and the naïve buyer. “The maddening thing is that, as a criminal investigator, there is nothing I can do about getting the house back,” explains Don Carrol. He says, “You can’t get the deed unrecorded. You have to file additional documents alleging forgery, which generally means you have to hire an attorney and it’s not cheap.” If you believe that any fraudulent documents have been recorded on your property, Carrol advised you file a complaint at the Arizona Attorney General’s office online at azag.gov.
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