The Federal Bureau of Investigation’s (FBI) Boston office has seen “a steady increase” in title theft — so much so that it has issued a warning to property owners and real estate professionals to beware.
The scams the G-men have labeled as “quit claim deed fraud” have resulted in “devastating consequences” for owners who had no idea their properties were being sold “right out from under them.”
The schemes involve fraudsters who forge documents to record a phony transfer of property ownership. Criminals either sell the properties — typically vacant land parcels or unoccupied houses — or take out a mortgage on them. Some go so far as to rent houses, the FBI said.
Whatever the ploy, the real owners are forced to go to court to reclaim their properties. The Bureau’s Internet Crime Complaint Center (IC3), which provides the public with a means of reporting internet-facilitated crimes, does not have specific statistics solely for quit claim deed fraud. Rather, that falls into the real estate crime category.
Nationwide, from 2019 through 2023, 58,141 victims reported $1.3 billion in losses relating to real estate fraud. In the Boston Division — which includes all of Maine, Massachusetts, New Hampshire, and Rhode Island — 2,301 victims reported losing more than $61.5 million during the same period.
The vast majority of these victims were in Massachusetts. But the reported losses are most likely much higher everywhere because many victims have yet to realize they’ve been had, don’t know where to report the crime, or are too embarrassed to do so.
“Anyone who is a victim of this type of fraud should report it to us,” said Jodi Cohen, the special agent in charge of the Boston Division. Unfortunately, there’s only a 72-hour window within which the FBI is likely to be able to snatch lost properties or funds back from the scammers.
Cohen said homeowners in her region “are having their roots literally pulled out from under them and are being left with no place to call home. They’re suffering deeply personal losses that have inflicted a significant financial and emotional toll, including shock, anger, and even embarrassment.”
FBI Boston is working with property owners, real estate agents, county registers, title companies, and insurance companies to thwart the fraud schemes. But it’s no easy task, if only because these scams take many forms.
For instance, scammers might comb through public records to find vacant parcels of land and properties that don’t have a mortgage or other lien and then impersonate the landowner, asking a real estate agent to list the property for sale. Owners have no clue their properties have been listed until they’re alerted, sometimes after a sale has already gone through.
Family members, often the elderly, are sometimes targeted by their own relatives and close associates, who convince them to transfer the property into their name for their own financial gain.
In other instances, so-called “title pirates” use fraudulent or forged deeds and other documents to convey title to a property. Often this scheme goes undetected until after the money has been wired to the scammer in the fraudulent sale, and the sale has been recorded.
In urging the public, realty agents, and loan professionals to take its warning seriously, Cohen suggested people monitor their property records and set up online search alerts. Many local records offices offer such a service. But their alerts come after the fact — after the “dirty deed” has been done, no pun intended.
One new service, EquityProtect, goes beyond monitoring to safeguard titles with a patented process that locks down the title and protects the rightful owner from any transfers or new liens. Using facial recognition, the Reno, Nevada-based company will verify owners are indeed who they say they are, and will unlock the title only at their request.
The service, which Hancock County, Indiana, among several others, now offers free to its residents, also uses multiple data aggregators to verify ownership by challenging scammers with questions to which only the rightful owner knows the answers. In Benton County, Indiana, the service is being offered to owners at a half-price discounted subscription rate.
Meanwhile, the FBI also suggests owners visit their vacant properties periodically and ask neighbors to report suspicious activities. Also, owners should take action if utility or property tax bills suddenly increase or stop coming.
In addition, the Bureau wants realty and mortgage professionals to avoid remote closing when possible and request copies of documents only the true property owner would have, including their most recent tax bill, utility bill, or survey from when the property was acquired.
They also should send a certified letter to the address of record on the tax bill and look up the phone number by reverse search or through the phone carrier and call to verify ownership. The public notary should confirm the owner has attested to the documents.
Fraud or suspected fraud can be reported to the FBI’s Internet Crime Complaint Center at www.ic3.gov.
