Your entire house can be stolen and sold. What to know about deed theft

Deed theft has become a big business for crooks: They slap their names on unsuspecting homeowners’ titles, then proceed to milk the properties dry.

Sometimes they sell the property outright to another unwary party. Other times, they take out a mortgage and sneak away with the proceeds of that loan.

From 2019 through 2023, more than 58,000 property owners reported real estate fraud to the FBI. Victims were cheated out of a combined $1.3 billion, according to statistics collected by the FBI, the National Association of Realtors and EquityProtect, a fraud prevention company. In 2024 alone — the last year for which statistics are available — losses from deed theft topped $173 million and the FBI fielded almost 9,400 reports.

But those figures are likely the tip of the proverbial iceberg. Many people are too embarrassed to report they’ve been filched. Others haven’t discovered it yet.

To combat the fraudsters who run title theft scams, states are working to put laws on their books as fast as they can. But it’s not soon enough to stop fraudulent deeds from being recorded at the county level.

Nationwide, county recorders process nearly 300,000 documents daily, says EquityProtect. As long as a document is presented in its proper form, they are legally required to record it. They cannot — and do not — verify filers’ identities in real time.

A fraudulent deed — a forged signature, perhaps, or a fabricated notarization or stolen identity — can be recorded within minutes of being submitted. Most victims don’t discover they’ve been had until they go to sell or refinance, which could be years later.

When they do discover it, even the strongest criminal statute does not restore their title. It does not recover their equity. It does not pay their legal bills, which can be hefty. EquityProtect reports that reversing a fraudulent title costs victims up to $150,000 in legal fees.

Some county-run notification services alert owners that a document has been recorded in their names. But that doesn’t stop the papers from being recorded. For a monthly fee, private firms also monitor clients’ titles and notify them if there is a change. But that, again, doesn’t stop the crime. That’s why some companies offer to cover your legal fees, up to a certain amount, should you be victimized.

The Nevada-based EquityProtect goes further with a program that it claims is “the only system on the market that prevents deed theft before a fraudulent document reaches a county recorder’s desk.

“Unlike alert-based services or legislative remedies that activate after the fact,” the company says its SmartPolicy system places a legal encumbrance on the property title, which must be cleared before any transfer can take place. The preventive encumbrance can be lifted in seconds — but only by the rightful owner.

The company also requires “bank-grade multifactor authentication from the verified property owner before any title change is authorized,” and it monitors public records and multiple listing services for fraud indicators before fake documents ever reach a recorder.

Meanwhile, states are racing to enact meaningful legislation aimed at deed fraud. In Tennessee, the American Land Title Association reports, a bill has been introduced that would require property deeds to be prepared by a licensed attorney, a licensed title insurance agent, the property owner or someone legally authorized to act on the owner’s behalf. The person who prepares the deed would then have to sign a sworn affidavit confirming they prepared it and are legally authorized to do so.

Arizona requires identification when recording documents. A new bill adds safeguards for notaries and creates a notification system so property owners are alerted if ownership or address changes are filed. Similarly, Texas requires a valid photo ID for filing deeds, and strengthens notary regulations by prohibiting notaries from sealing documents if the person signing is not physically present.

Texas also focuses on remediation for victims. It has a “self-help” expedited judicial review process that allows victims to file an affidavit to remove a fraudulent deed in just a few months rather than years. Arizona’s remedies include quiet title actions to remove a fraudulent deed or lien from the public record.

Florida has implemented stricter, multilayered requirements to combat deed fraud, focusing on enhanced identification and notification. Key measures include mandatory identification verification for recording, witness address requirements and free property fraud alert services from county clerks.

While momentum “is real,” says EquityProtect, 16 states still have no deed-fraud-specific laws at all, while laws in some state contain no criminal penalties.

Lew Sichelman has been covering real estate for more than 50 years. He is a regular contributor to numerous shelter magazines and housing and housing-finance industry publications. Readers can contact him at lsichelman@aol.com