I was in a meeting with some attorneys Monday. This attorney was lamenting the title sequence that has developed with our electronic filing methods. It appears that there have been two instances of Title theft recently in our little county,,,,,,,,that were caught.
We were discussing how to protect yourself from that happening.
Came up with a few ideas, anyone else have a solution?
My thinking is that any lender would be obliged to check a title report. If they don't they deserve to get stuck. If a thief recorded a deed and then tried to take out a loan, the lender should pick up on the incongruity - if the property has an outstanding mortgage and, therefore, unresolved trust deed in the chain of title. So having even a small outstanding mortgage balance on the property will act as de facto title insurance. Knowing this, thieves will shy away from properties subject to trust deeds.
Not sure what Dave Ramsey would think of this.
Why is the theft easier to accomplish due to the electronic filing than standard filing?
From what I understand these transactions all happen faceless. No one sees the "buyer" all that has to happen is to create some fraud documents, maybe a transaction that happens on MERS, the property transfer is filed without any human showing up. So, I'm told. Then an application to a loan company, a lien shows up on the house the bank sends money to some account that has no intention of ever paying the loan back.
I like Norman's idea. I don't have a mortgage on my house, I do on another property. I did have a line of credit on the house and recently closed it because I had hail damage and the bank figured they were in charge of the insurance money. The insurance company said they had to be included since they had the "mortgage". I said it's a line of credit with no outstand debt on it. I had it for construction payments. Maybe I should have kept it open, but now it's gone and I don't feel much like starting it up again with that bank. However, it would give me coverage, they would never let a Title crook close out that lien, it took a heavy lift just for me to do it standing at the loan officer's desk.
We had a case in Wake County, NC where a lady just wrote a fraudulent deed, walked in and recorded it. She then used that to get through the gate of ritzy subdivision and took possession of a guy's luxury house. It wasn't that difficult to prove the fraud but it was expensive and time consuming. NC is currently working on legislation to make the process of reinstating title less onerous for the victim, but I don't think there's much that can be done to prevent someone from recording a fraudulent deed.
My guess is that eRecording makes it more difficult to prove who committed the fraud. The victim in the NC case was able to use video from the RoD's office to prove the squatter knowingly recorded the fraudulent document.
I've wondered about this on some rural lots I've surveyed that involved an old swindler that was always horse trading big and small parcels, timber rights, and access. If they got wind of a messy estate, a leftover parcel, or similar, they could easily just write and record a deed without attracting much attention. From my research of Georgia in the early and mid 1800s, more than a few land surveyors were guilty of title fraud.
Around here you can register your name and email with the clerk and if a document comes through with your name on it you will get an email
My County here in Colorado does the same thing as James-vianna's post indicates- I registered my account with the Clerk and Recorder's office (on line and for free) and if any deed or document is filed on my property, they email me immediately.
I think some counties in NC are setting up the automatic notice protocols.
What would happen if the owner of a suspected brownfield site deeded their property to some random elderly individual? Are attorneys required to contact the grantee?