Acquiring Title by a Forged Deed
I recently received an email inquiry from a client. Some of her older friends were questioning whether a“hacker“ could acquire title to someone’s home without their knowledge. She inquired whether that was possible. Unfortunately, it is.
If a person has enough information about another person, they can conceivably create a deed with a forged signature. Local Register of Deeds offices are in the business of filing title work, not evaluating the authenticity of particular documents. Upon filing a forged deed at the Register of Deeds, the deed enters the public record. We rely upon the public record for accurate information for things like real estate transactions and financing. With the prospect of eventually get discovered, forgers tend to attempt to get their money out quickly. Once the forged deed is filed,a hacker may take out a home equity loan or flip the property. The problem tends to be larger with vacant land and rental properties.
A forged deed contains a fraudulent signature. It’s an entirely different beast in the eyes of the law from a deed where the signature and authority to convey the property are procured by fraudulent means. A forged deed is void. Fraudulent conveyances are voidable. In Michigan, a person who falsely makes, alters, forges, or counterfeits a deed is guilty of a felony punishable by imprisonment for not more than 14 years.
While a forged deed doesn’t transfer title, there can be costs incurred to clear title. It can be expensive to fight to reacquire title to property you already paid for. Some title insurance policies cover the risk of someone claiming title based on a forgery.
Fraud alert services are coming of age. These services can be offered by private or public entities. Private services will perform periodic title searches to see if any documents have been recorded on a client’s property. The owner is notified if a deed is filed. Some counties offer free searches through their Register of Deeds. If you are lucky enough to live in a county where this kind of service is offered, use it often.
Finally, keep in mind that in some cases, there can be more than one victim. In addition to the party whose house was fraudulently sold, there may be an unwitting buyer who was pressured or seduced into buying a house that was not for sale. If it sounds too good to be true, or the time frames seem unreasonably short, take a deep breath and look closer.