How deed theft happens
Title fraud, often called deed theft, usually involves someone recording a forged or fraudulently obtained deed that transfers your property to them or to a company they control. They may then borrow against it or try to sell it. Vacant homes, properties of older owners, and homes caught up in estates or foreclosure are frequent targets. Some schemes rely on pressuring owners into signing papers they do not understand, which can be harder to undo than an outright forgery. New York has expanded its tools against deed theft in recent years, and in New York City the Sheriff's office investigates many of these complaints.
Locking down the record
Check what has been recorded against the property with the county clerk or, in New York City, through the city's online recording system, and sign up for a property fraud alert if your county offers one. Gather your own deed, title insurance policy, mortgage statements, tax bills, and any documents you signed with anyone who approached you about the home. Report the fraud to police or, in the city, to the Sheriff, and notify your title insurer and any mortgage lender in writing. Do not sign anything new about the property without advice, including offers from strangers to "help" fix the problem for a fee.
Clearing title in court
A fraudulent deed usually stays on the record until it is cancelled through a legal process, so restoring title often means a lawsuit to void the deed and any mortgages built on it, along with a notice of pendency to warn buyers and lenders. Where a bank lent money on a forged deed, the dispute over that lien is often the hardest part. A criminal case may run at the same time, but it moves on the prosecutor's schedule, and owners often need a civil action to protect the property sooner. Pulling the recorded documents and identifying everyone named on them comes first, and we check early whether title insurance may cover the cost of the action. We also discuss how to protect the property while the case is pending.
