No Bad Deed—Protecting Homeowners from Fraudulent Deeds

With the median price of home in some Bay Area counties topping the $1 million mark real estate fraud is rampant.  There are many types of real estate fraud – from equity stripping to foreclosure rescue, however, in recent years, the California Department of Real Estate (DRE) has noticed an uptick in criminal fraud related to real property deeds. 

Fraudulent deeds can prevent a homeowner from selling his or her property or hold up an inheritance, so it is important to identify and remove fraudulent deeds as quickly as possible.  All homeowners should to be educated about California’s recordation process, what potential scams look like, and what needs to be done if they think there is a fraudulent deed on their property.

California has legal requirements for a document to be recorded, and the recorder’s office must accept documents that meet those standards.  However, the recorder’s office is not required to verify the legitimacy of any document.  Thus, while the system makes it easy for many documents to be recorded, it does not provide safeguards or deterrents for filing fraudulent deeds.  Some counties do have preventative measures such fraud notification programs.  You should check with your county to see if they have such a program and, if so, which documents will prompt notification.

Scammers have several common tricks to file fraudulent deeds against a property.  Typically, senior citizens, homeowners whose primary language is not English, and homes in distressed areas are most targeted.  Scammers will often approach homeowners and then either con or pressure them to sign a deed transferring the property, or they may simply forge the homeowner’s name.  Never sign blank documents.  Always get copies of all documents that you do sign. 

If you notice a warning sign that there might be a fraudulent deed on your home, you should gather all of the information that you have regarding the fraudulent deed and immediately report it to the police, and the recorder’s office in the county that your property is in.  Warning signs include becoming aware of a recorded document that you did not sign, noticing that a loan was taken out on your property, or if you stop receiving your property tax bill. 

Even in the absence of red flags it is a good idea to check your property records periodically.  For most people their home is their largest asset and an important part of their retirement planning – it needs to be protected. 

Our firm, Cotchett, Pitre & McCarthy, LLP represents homeowners and consumer in real estate fraud cases.  We have a long track record in these fields.

The author wishes to acknowledge the research work of Francesca Reifer, a law clerk at Cotchett, Pitre & McCarthy.