An increasing number of forgeries are surfacing on real estate documents.
The criminal act of forging a name on papers related to a property's chain of title can cause major problems and cost a bundle to correct. The lure is big money. A person can forge your signature to certain documents, pretend to be you and sell or rent your property or take out a large loan using your property as collateral.
Such activity is creating personal agony, frustration and cost for the real owners. Title insurance companies issue policies that protect property purchasers and lenders against the consequences of forgeries in the chain of title. But the increasing problem affects everyone concerned.
A few years ago, most forgeries involved residential transactions and relatively few dollars. They usually involved a person who forged the signature of his or her spouse -- particularly where the couple was separated or obtaining a divorce.
More forgeries that are the work of professionals have surfaced. Their methods are sophisticated and have caused significant losses.
The documents most often forged are deeds of trust, deeds of reconveyance, quit-claim deeds and substitution of trustee forms. The forgeries often appear to transfer title to the forger or clear away encumbrances so an equity loan can be obtained.
When forgeries occur, the property owners whose titles are forged can suffer a major loss. Their titles are clouded, and they are often required to pay attorney's fees and court costs to eliminate the forged documents from the chain of title.
Where there is title insurance coverage, the settlement costs force title insurance companies to increase rates to remain in business.
The title insurance industry is taking action to stop the rising tide of title forgeries, according to Larri Jones, a regional vice president of Chicago Title Co. Industry leaders are pushing for stiffer penalties to be imposed on convicted forgers.
Some title insurance companies reward employees who detect forgeries in a title chain. The Chicago Title offices in Ventura County, Calif., for example, offer a "$500 bounty" to employees. And there have been several recent takers.
"The most effective protection against forgeries is in the hands of consumers -- owners, buyers and sellers of real property," Mr. Jones said.
"Before you sign any real estate document, read it carefully. Don't rush it. Where appropriate, compare signatures. Before buying a home or investment property, or making a loan that is secured by real property, be sure a thorough title search is made. And obtain title insurance."
Use common sense. A real estate transaction is probably the largest financial commitment one will make. Be sure everything
is in order.
Q: Are home sales and prices going up or down?
A: The RELO relocation network recently surveyed owners of their 1,200 member brokerage firms. These companies reported an overall 16 percent increase in home sales during the first five months of this year, compared with last year.
The dollar value of home sales increased by nearly 23 percent, according to a report from RELO.
A reader writes:
I read your column on Community Land Trusts. Mobile homes and mobile home parks have always had this same concept, the only difference being where you obtain your title vs. a conventional home title (which involves the cost and use of a lawyer, closing costs, etc!).
My comment is that Homestead Rebates are not applicable in the case where the land is not owned, and any tax deductions that a homeowner may be entitled to take are not applicable to homeowners who rent or lease the land.
Although the rebates or tax deductions are not available to "non-land-owning homeowners" there is an advantage to owning home, as it does appreciate in value and rent is not "thrown away." And renting or leasing the land is a good, less expensive way to buy and own a home.
Questions may be used in future columns; personal responses should not be expected. Send inquiries to Copley News Service, P.O. Box 190, San Diego, CA 92112-0190.