A coalition of six industry and consumer trade groups have united to issue a new brief with recommendations on how to help combat the rise in deed fraud. According to the Federal Trade Commission (FTC), fraud losses in 2023 cost U.S. consumers more than $10 billion, of which, $2.7 billion is attributed to imposter scams.
Groups contributing to the “What Is Deed Fraud?” brief include the American Land Title Association (ALTA), AARP, Mortgage Bankers Association (MBA), National Association of Realtors (NAR), National Notary Association (NNA), and Property Records Industry Association (PRIA).
Although deed fraud can include a variety of real estate-related crimes, most schemes involve the impersonation of a property owner and the recording of fake or forged documents in local land records. These crimes result in legal costs, reduction in equity or property value and even property loss.
“Protecting the property rights of all Americans—and what is likely their largest financial investment—is of utmost importance,” said Elizabeth Blosser, VP of Government Affairs at ALTA. “The amount of money lost to deed fraud and other real estate-related scams simply is not acceptable. We must combat these threats.”
Proper Prevention
“What Is Deed Fraud?” outlines ways in which to help prevent and mitigate deed fraud, including:
- Providing identity verification options for notarizations performed in the physical presence of the notary
- Providing better security for access to public records
- Requiring continuing education for real estate professionals and notaries
- Allowing local government offices to report suspected fraudulent documents to law enforcement
- Offering property owners free access to property recording notification systems
“Older Americans are at higher risk of deed theft and the results are financially and emotionally catastrophic,” said Jenn Jones, VP of Financial Security and Livable Communities at AARP. “We must do more to protect unsuspecting homeowners and homebuyers against criminals. In a world with increasingly rampant fraud, educating the public and advocating for stronger local and state consumer protections is critical.”
New York Attorney General Letitia James recently enacted a new law establishing deed theft as a crime and expanding the Office of the Attorney General’s (OAG) ability to prosecute deed theft. The legislation (S08306), co-authored by Attorney General James and sponsored by State Senator Zellnor Myrie and Assemblymember Landon C. Dais, establishes deed theft as a crime, amends the statute of limitations to give homeowners and prosecutors more time to seek justice, and grants OAG original criminal jurisdiction to prosecute deed theft. This is Attorney General James’ latest effort to protect New Yorkers from deed theft, a criminal scam that robs New York families of their homes and livelihoods.
Under previous law in New York state, deed theft itself was not a crime. S08306 amends penal law to make deed theft a form of grand larceny, extends the statute of limitations to allow for more time to identify and investigate cases, and grants OAG the original criminal jurisdiction to prosecute deed theft crimes alongside district attorneys statewide.
Raising Awareness
To support victims of deed fraud, ALTA, AARP, MBA, NAR, NNA and PRIA are calling upon legislatures and government bodies to strengthen data gathering needed to help law enforcement more easily identify deed fraud victims; increase the resources given to local, state and federal law enforcement to combat the threat of deed fraud; and provide resources and expedited processes for victims to reestablish title in the legitimate owner’s name.
“The National Notary Association believes these owner/seller impersonation deed fraud policy recommendations are reasonable and necessary steps that should be adopted to protect property owners, real estate professionals and even Notaries who are victims of these crimes,” said Bill Anderson, VP of Government Affairs at NNA. “The NNA urges Notaries in every state to learn the warning signs of owner/seller impersonation deed fraud and be vigilant in verifying the identities of all grantors seeking notarization of real property convenance deeds.”
Keeping Ahead of the Curve
“Deed fraud, along with other real estate crimes, remains pervasive,” NAR said in a statement. “The National Association of Realtors, along with other industry leaders, are committed to providing continuing education and resources to support consumers and industry professionals in understanding this issue and working collaboratively to combat these real estate scams.”
According to the FTC, consumers reported losing more than $10 billion to fraud in 2023, marking the first time that fraud losses have reached that benchmark. This marks a 14% increase over reported losses in 2022. Consumers reported losing more money to investment scams—more than $4.6 billion—than any other category in 2023. That amount represents a 21% increase over 2022. The second highest reported loss amount came from imposter scams, with losses of nearly $2.7 billion reported. In 2023, consumers reported losing more money to bank transfers and cryptocurrency than all other methods combined.
“PRIA is proud to partner with these other great organizations as we continue to battle the topic of deed fraud,” said PRIA President Dan Shmukler. “Collaboration is a key mechanism to solve any problem, and deed fraud has impacted and can impact anyone. PRIA looks forward to bringing its resources and knowledge to this conversation.”
