When a company attempted to auction off Graceland in May, the iconic former home of Elvis Presley in Memphis, a Tennessee court had to intervene to stop the sale.
The court stopped the sale because the company trying to auction the Graceland property was fake. The fraudulent also provided a supporting document that falsely claimed that Lisa Marie Presley, Elvis’s late daughter, had defaulted on a loan, and she took out using Graceland as collateral.
While this daring and complicated attempt to scam a famous family, Graceland made national headlines, most other cases of attempted title theft or mortgage fraud don’t get noticed. However, properties like Graceland, where the original owners have passed away, are prime targets for scammers, according to Victor Petrescu, a real-estate attorney with Levine Kellogg Lehman Schneider & Grossman in Miami.
He mentioned that homes owned by out-of-state owners, empty land and investment properties owned by LLCs are also particularly at risk.
Here’s how it happens: A scammer targets your house and takes your identity, using tricks like taking your personal information and creating fake IDs. They try to sell your home to an unsuspecting buyer with a forged deed in your name. Another trick to scamming is to apply for a mortgage application in your name to pull cash out of the house.
The good news is that, in most cases, a fake deed won’t transfer your title, even if it looks like a transfer in public records, a forged mortgage won’t mean you have to pay anything. But the bad news is that getting your title back and clearing any fraudulent mortgages can take a long time and is an expensive process.
According to Sarah Frano, vice president and real-estate fraud expert at First American Title Insurance Co., there has been a significant increase in seller impersonation fraud over the past few years, where a fraudster impersonates a property owner by forging a deed to transfer the property to an unsuspecting buyer.
There are a few reasons why fraudulence is increasing, one big factor is the growing popularity of remote closings and notarizations, where people do not need to be present in person at the closing table. According to Intercontinental Exchange, home equity reached the all-time high of $16.9 trillion in the first quarter of 2024. For scammers, this equity which can be accessed through the sale of a home, a cash-out refinance or a second mortgage, presents an opportunity to sell the property without the owner’s knowledge or to steal your identity to secure the mortgage.
“If you purchased a house and have a substantial mortgage, the chances of it being stolen from you are pretty slim,” said Richard Howe, Register of Deeds of the Northern District of Middlesex County in Lowell, Mass. “The key for scammers is to get a loan against the property, and no one’s going to buy or loan against a property with big mortgage on it.”
Petrescu said he’s also seeing more title theft cases with investment properties owned by LLCs. In this case, a partner who was recently kicked out of the LLC still acts as if they are part of the company and executes documents trying to transfer the property even though they are no longer authorized to sell.
Still, the chance of losing your home to title theft is low. “It would take an extreme situation where the owner knew about the issue and did nothing to fix it before that deed could be considered valid,” said Petrescu.
But there is still a consequence. If a homeowner finds a fraudulent deed or mortgage while applying for a home-equity loan, it could delay the loan application by six months or more while the title gets cleared, Petrescu said. And, if they are trying to sell the property, a title company might not want to insure it if there’s a rogue deed in the county records even if it is obvious the transfer wasn’t valid. “So, this has real consequences,” he said. “Even if someone doesn’t lose the title to their property, it could be a big setback for them.”
Here are some tips to help you avoid becoming the victim of home-title theft like the Graceland Scam.
Keep an eye on the early signs
After identifying a vulnerable property, a home-title thief will usually try to impersonate you using fake documents, like driver’s license or Social Security card. There are some obvious signs that someone might be trying to steal your identity. Credit inquiries will show up on a credit report, so make sure to check your credit reports regularly or consider subscribing to one of the paid services that monitors credit for you. You can also freeze your credit, which stops access to your credit report. If you get strange bills in the mail or phone calls from lenders you haven’t contacted, or if people start asking about who owns your vacant home, those can be signs that home-title theft might happening.
Monitor your property title
A lot of counties offer free title monitoring services that let owners know if a new document is recorded against their property. In the Northern District of Middlesex County in Lowell, MA., owners can register up to three residential properties, according to Howe, who mentioned that in his 29-year of experience, he only seen one case of title fraud, which happened in January 2024, and that involved a vacant property because the owners had passed away. Frano recommends setting up a free Google alert for your property address. This way, if a fraudster lists your property for sale, you might be alert and may help you stop it before it happens.
Purchased the right type of title insurance
While lenders need title policies to protect themselves when a property is mortgaged, it is a good idea to get the owner’s policy when you buy a house. There are two different types of owners’ policies, and they have similar names, which can get confusing. A standard American Land Title Association (ALTA) Owner’s Policy covers only for forgeries that happened before you purchased your home, like fake deeds in the title chain before you’re closing. But this policy won’t protect you from forgery after your property purchase. For that, you might want the more comprehensive Homeowner’s Policy of Title Insurance, which covers forgeries that happen after your closing, according to Steve Gottheim, ALTA general counsel. This enhanced coverage is available in most states and cost extra, depending on where you live and the purchase price of your home. Both policies will cover you for losses due to fraud or forgery, including attorney fees and expenses to clear the title, up to the policy limit, but only the Homeowner’s Policy covers fraud after you buy the home.
