Whether you’re a first time homebuyer or a seasoned real estate mogul, there’s something new on the horizon that you need to be aware of. Property fraud.
You may remember the days when people could trust their fellow man. But sadly, it’s not that simple anymore. Now we need to be on the Do Not Call List to keep away pesky telemarketers. We have to watch out for email “phishing” scams. And we’ve gone from leaving our houses unlocked to locking down both the house itself and all our real estate documents.
If you haven’t already heard, here’s what you need to know about property fraud.
First of all, according to the FBI, property and mortgage fraud are the fastest growing white-collar crimes in the U.S. Think of it as the real estate version of identity theft. And that means that everyone who owns property is at risk.
But what exactly is property fraud? The official definition for this crime is when another person uses your property for their own illegal purposes – without your knowledge or approval.
So how does it work? And how does it affect you? Well, that’s the scary part. It’s actually pretty easy – for the bad guys. But it’s not so easy for you to straighten it all out if too much time passes before you realize what has happened. These white-collar criminals simply file fraudulent documents with the county land records office, making it appear as though they are now the homeowners (of your house). From there, they can sell it or rent it out for a profit – just as if they really owned it.
Who is at risk? Well, basically, anyone who owns property is at risk, but especially absentee homeowners. If you have a second home in another city or state or have left your primary home due to other circumstances such as a foreclosure, you may be at greater risk because you aren’t there to observe unusual activity at the property.
What can you do to protect yourself? Well, that’s the good news. If you live in Dane County or one of 14 other Wisconsin counties, you’re in luck. Some local land records offices around the country (including the Dane County Register of Deeds) have collaborated with a notification service to establish the Property Fraud Alert system that is designed to protect property owners. Call 1-800-728-3858 or go to PropertyFraudAlert.com for more detailed information.
How does it work? The service is free and works like this: Just sign up and choose the alerts you want. Possibilities include flagging your name, business name, business address and home address for alerts. Then if there is any activity on your selected property, you’ll get an alert by phone or email telling you that a document has been recorded that matches your name or address. If you made the changes, fine. If someone else did – you’ll know it before they have a chance to do more damage.
When signing up for alerts, the Dane County Register of Deeds recommends using your full last name but only a letter or two for your first name. For instance, using “S” or St” instead of “Steven” will pull up names that were recorded with just initials or with misspelled or shortened versions of Steven – such as Steve, Stephen or Stephanie. If you spell out “Steven” it would miss these alternate names.
What happens if a document is filed using your name or property? The alert system will notify you of the county, the type of document, the document number, the recording date, and the exact name that produced a match.
What happens next? If you get a Property Fraud Alert, there are several things you can and should do – immediately.
First, contact any other owners of the property. If you own real estate with a relative or business partner they may be aware of the situation and can explain what happened and why. If they, too, are caught off-guard you can work together to investigate and rectify the situation.
Contact an attorney. They can help you understand what was type of document was recorded, how it affects you legally and financially, and what legal recourse you have.
Work with your lending institution. Contact your bank or mortgage lender right away to report any fraudulent activity. Working together to resolve the problem (rather than against each other) can benefit you both.
And remember… the alert system can’t prevent property fraud, but it can definitely help you fight it and fix it. By taking immediate action to correct the fraudulent activity, you can save your finances, your credit and your good name.
