Sunday, September 24, 2017

Protecting against real estate fraud

Several Registers of Deeds in Michigan, including Marquette County, now offer a free Property Fraud Alert service. This will send you an alert any time that a document relating to your home or other real property is filed.

Surprising as it may seem, one of the ways that identity thieves can defraud banks and disrupt the accounts of individuals is to apply for a home equity line of credit in the name of a homeowner, without his knowledge. When a mortgage or other document is recorded, there is no legal requirement that notice given to the landowner that the recording has taken place. (The Register of Deeds will return the document, after recording, to the address as directed on the document itself.)

How often does this happen? The answer is not clear. There are several known varieties of mortgage fraud, and the reports indicate that this one is relatively uncommon. But it has been reported in several jurisdictions. 

If a fraudulent mortgage is given to a lender by a fraudster pretending to be the homeowner, there can be a long delay before it becomes apparent that the damage has been done. The thief will be long gone, and the issuing bank will often have accumulated a number of missing payments, before the issue comes to the attention of the homeowner. The first clue can be the discovery that the homeowner's credit rating has been seriously impaired. The work needed to convince the bank that the mortgage it thinks it holds was not in fact executed by the homeowner can take months.

The Property Fraud Alert service will provide a notice, by email or by telephone, of any filing made in the name of the subscribing participant. This will give him or her early notice and allow for corrective action before the problem grows to unmanageable proportions.

Only 13 of Michigan's 83 counties offer this free service. In the Upper Peninsula, this includes Marquette and Houghton counties.

If you want to find out right now what real estate documents are on file under your name, you can visit the Marquette County Register of Deeds DirectSearch page.

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