Seller impersonation fraud has reportedly risen significantly over the years, and one such fraudster attempted to cash in by facilitating a fraudulent sale of Graceland, the famous Memphis, Tennessee, home owned by the late Elvis Presley.
But while a fraud attempt targeting such a famous structure and family would easily make national news, the vast majority of title theft and mortgage fraud schemes do not. The Graceland incident, however, highlights some common tricks that scammers may try to pull on ordinary people, according to a story published this week by the The Wall Street Journal.
A company recently attempted to auction off Graceland, claiming that Elvis’ late daughter, Lisa Marie Presley, had defaulted on a loan that used the palatial home and now-museum as collateral. Last month, actress Riley Keough — Lisa Marie’s daughter and Elvis’ granddaughter — sued to stop the sale and alleged that the company was perpetrating fraud.
The company that aimed to instigate the auction did not appear to be real, and the documents supporting their claim were suspect, according to reporting from the The Associated Press. A scammer later took credit for the ordeal.
But homes where the original owners are deceased are common targets of similar scams on much lower-profile properties, according to a Miami-based real estate attorney who spoke with the Journal.
“Here’s how it works: A fraudster targets your house and assumes your identity, using tactics similar to identity thieves to acquire your personal information and create fake IDs,” the story explained. “He or she then tries to sell it to an unsuspecting buyer by executing a forged deed in your name. An alternative scam is to submit a mortgage application in your name to get cash out of the house.
“The good news is that except in very rare circumstances, a fake deed won’t transfer your title, even if it initially gives the appearance of a transfer in public records, nor will a forged mortgage create any obligation for an innocent homeowner to pay. The bad news is that restoring your title and clearing the property of any fraudulent mortgages can be a lengthy and expensive process,” the story said based on input from sources.
Impersonation fraud has risen “sharply” over the past few years according to Sarah Frano, vice president and real estate fraud expert at First American Title Insurance Co. Some of the factors influencing this could be the increasing popularity and prevalence of remote closings and notarizations, as well as much higher levels of home equity from pandemic-induced home price appreciation increases.
“For scammers, that equity, which can be unlocked by a sale of a home, a cash-out refinance or a second mortgage, is an opportunity to sell the property out from under you or to steal your identity to mortgage your house,” the story stated.
While the risk of losing a home to title theft is “quite low,” according to the story, experts recommend steps that a homeowner can take to safeguard themselves. The first is to be alert to early warning signs, since a scammer will often try to impersonate you with forged documents. New credit inquiries that weren’t requested, strange bills in the mail or suspicious phone calls from lenders you never previously contacted are among the signs to look out for, the story suggests.
Monitoring your title policy is also recommended, and some counties offer free title monitoring that informs a homeowner if new documents are filed against their property. The “right type of title insurance” is also recommended, according to Steve Gottheim, general counsel for the American Land Title Association (ALTA).
“A standard [ALTA] Owner’s Policy provides coverage only for forgeries that took place before you purchased your home, such as fake deeds in the chain of title before your closing,” Gottheim told the outlet. “But this type of policy won’t protect you against forgery occurring after your property purchase. For that, you may want to consider the more comprehensive Homeowner’s Policy of Title Insurance, which does cover forgeries occurring after your closing.
“That enhanced coverage, available in most states, comes at an additional cost, though, which varies based on the location and purchase price of your home. Either policy will cover you for losses you incur due to fraud or forgery, including attorney fees and expenses incurred to clear title, up to the policy limit, but only the Homeowner’s Policy will cover fraud after you purchase the home.”
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