FBI Warns Homeowners Of Deed Fraud Targeting Mortgage-Free Properties

The scheme begins when scammers search public records for vacant properties or real estate

The FBI is warning property owners about a fraud scheme in which criminals impersonate homeowners and use forged documents to sell real estate they do not own, putting mortgage-free properties and vacant land at particular risk, Moneywise.com reports.

The scheme, commonly known as deed fraud or quitclaim deed fraud, can begin when scammers search public records for vacant properties or mortgage-free real estate. Criminals then pose as the legitimate owners and attempt to sell the properties without their knowledge.

The FBI’s Boston field office warned that scammers may use information obtained through public records to impersonate property owners. Fraudsters can create fake identification documents and use email accounts and phone numbers that make them appear legitimate to real estate professionals and prospective buyers.

Properties without mortgages or liens can be attractive targets because a lender is not involved in the transaction and therefore cannot flag potential inconsistencies. For homeowners, the schemes threaten an asset that can represent years of accumulated equity and generational wealth.

Federal prosecutors have brought charges in cases involving the alleged scheme.

On July 23, the U.S. Attorney’s Office for the District of Massachusetts announced charges against three men accused of participating in schemes involving vacant, unencumbered properties in Massachusetts, Georgia, Indiana, and Tennessee. Prosecutors alleged the defendants impersonated out-of-state property owners and deceived real estate professionals into selling properties to unsuspecting buyers.

The FBI has previously warned that quitclaim deed fraud is on the rise. From 2019 through 2023, 58,141 victims reported approximately $1.3 billion in losses from real estate fraud nationwide, according to the agency. The figures include multiple types of real estate fraud, not solely deed fraud.

Homeowners can protect their property by regularly checking online property records and signing up for property or title alerts through local government offices when available. Owners should also investigate unexpected changes involving property tax or utility bills and periodically check vacant properties.

Suspected fraud can be reported to the FBI’s Internet Crime Complaint Center. Property owners can also review their title insurance policies to see whether they provide coverage for forgery or expenses associated with restoring legitimate ownership.