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Lost Property

Sonja Haggert

OUR COMMUNITY HAS a Facebook-like online forum called Nextdoor. I tend to ignore the posts, which usually involve things like items for sale and new restaurant openings. But a recent post caught my eye—because it was from the Montgomery County Recorder of Deeds.

The article said Pennsylvania’s Attorney General had initiated a lawsuit against a realty company for deceptive practices targeting elderly, low-income and minority homeowners. The realty company was offering a “Homeowner Benefit Program” that gives homeowners anywhere from $400 to $1,000 upfront to lock into a contract. The contract is for 40 years and is recorded as a mortgage, often unbeknownst to homeowners. When they go to sell their home, they’re sued and forced to pay a termination fee of between 3% and 6% of the property’s value because they attempted to sell their home through another broker.

I’d grown curious about such things because of an earlier mailing we’d received, which had pitched a “home title lock” service that would protect us against home title fraud. I couldn’t believe that was even a thing. Home title fraud is the transfer of ownership of your home title to a criminal, who files the proper documents with the local authority to assume legal ownership of your property. How could that happen? Apparently, the county clerk who verifies that documents are filled out correctly doesn’t verify that the property sale is accurate.

Criminals seeking to perpetrate this fraud typically focus on vacant homes, rental properties and vacation properties. Some are so brazen that they’ll even target properties with the homeowners still in them. The criminals forge documents to transfer legal ownership to themselves. They then sell the property to unassuming third parties or take out equity lines of credit against the property with no intent of paying back the money borrowed.

What recourse do homeowners have? They’ll typically have to pay huge legal fees to clear up the crime with the parties involved, which might include a title company, lender, and a buyer or seller. They’ll probably also have their credit score negatively affected. How common is this theft? Not very, but senior citizens and property owners who have had their identities stolen are most vulnerable.

Real estate fraud is a growing phenomenon. Figures from the FBI report 11,578 cases in 2021 totaling $350 million, up from 9,654 cases in 2017 at a loss of $56 million. So far, title fraud is a small portion of that.

Having read about home title fraud, I was half-tempted to sign up for HomeTitleLock.com’s service, which costs “only” $19.95 a month. The site says it has an alert system and would work with customers to resolve the matter if they’re victims. Thanks to the Nextdoor article, I found a free service offered to Montgomery County, Pa., homeowners. FraudSleuth is a free property alert tool provided by our Recorder of Deeds Office. It will send out an email alert if something is recorded against your property.

If you aren’t fortunate enough to live in a state with such a service and don’t want to pay for one, the FBI suggests the following: Be sure to open all mail from your mortgage company. Follow up on any information and periodically check information related to your property through your county deed office. Checking may be free or you might have to pay a fee. Don’t recognize something? Be sure to look into it.

Sonja Haggert is the author of Invest, Reinvest, Rest. You can learn more at SonjaHaggert.com. Follow her on Twitter @SonjaHaggert and check out her earlier articles.

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