Real estate scammers have become a lot more brazen recently. They’re staking their claim on the million-dollar homes of the very wealthy, armed with nothing more than a few forged documents. These scammers can say that they own homes they’ve never set foot in, and the law often gives them the benefit of the doubt. So once their phony claim is in the system, it can be a nightmare to make it go away.
So how do these scams work, and more importantly, how can you protect yourself from falling victim to them?
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How Scammers Are Faking Deeds
With recent advances in technology, it’s become frighteningly easy for scammers to forge and file documents online. It’s usually pretty easy to get information about a property and its owner from public records. Scammers can then use this information to create a fake deed and file it with the local county recorder’s office. This means they’ve essentially transferred ownership to themselves.
Now the phony deed is on file, and now it’s a part of the official record. The scammers can take advantage of the property, maybe by trying to sell it or by taking out a mortgage. Even if they’re not able to steal the home outright, it still becomes a huge headache for the real owners.
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How Long Does It Take To Fix?
To fix this, property owners are forced to take the issue to court and present their evidence that the deed is fake. But this isn’t easy or straightforward. The courts move slowly, and the burden of proof falls on the rightful owner. It can be tough to sort out the mess — it could be a battle lasting months or even years. And during this time, the owner can’t sell or refinance their own property.
According to a recent article in the Wall Street Journal, this is exactly what’s happening right now with Spelling Manor, the 56,500-square-foot mansion built by TV producer Aaron Spelling. A husband and wife duo are the alleged scammers who filed a deed with Los Angeles County earlier this year claiming to be the owners. The court is still figuring this out, and in the meantime the real owners are stuck.
Who’s at Risk?
If you’re very wealthy and you own a home in the Los Angeles area, you might be targeted for this kind of scheme. Luxury properties are a popular target for scammers. That’s because the wealthy usually own their properties outright. It’s harder for scammers to pull off a fake deed when there’s still a mortgage on the property. Since there’s no mortgage, lenders might be less vigilant than they would be if they were dealing with a loan.
Warning Signs
The scary thing about title fraud is that it can happen without you even noticing. If you get some unexpected mail addressed to someone else at your property — especially official-looking documents — that can be a red flag. Another sign is if you suddenly stop getting your property tax bills, which could mean the scammer has changed the contact information on file and they’re getting your bills instead.
If you’re in the habit of checking your property records on a regular basis, you might be able to catch these red flags early. But most homeowners don’t do this. There are also title-monitoring services which exist to keep an eye on your records for you. They can alert you to any changes or new filings on your property, so you can take action immediately.
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This article originally appeared on GOBankingRates.com: How Scammers Are Seizing Million-Dollar Properties — Is Your Real Estate Safe?