I guess it’s a bit ungrateful to post this after being paid to do an ethics training for a federal agency, but still: anyone who expects governments to solve more problems than they create just isn’t paying attention. The problem, or course, isn’t the nature of government itself, but rather the human beings that operate them. And the brains that operate the human beings.
I present for your edification Craig Adams’ nightmare…
Adams recently learned that his 8,300-square-foot Raleigh, North Carolina home where he lives with his wife is no longer registered in his name. Oh, his mortgage and property taxes are up to date, but never mind—the deed to his home is now belongs to a stranger. Adams said one day he learned that a woman and probable grifter named Dawn Magnum had the deed to his home transferred into a trust she managed. He only learned about this when the property management company for his HOA asked him if he had sold his home after Mangum contacted it to get access to the private gated community where Adams’ property is.
Magnum initially said she thought Adams’ property was in foreclosure so she managed to get the deed to the home into her trust. “She filed a false warranty claim deed against this house and basically tried to steal it,” Adams told the news media.
Dawn Mangum has been arrested and charged with is obtaining property by false pretense.
Bu…but... how could his happen? It could happen because the system is stupid.
When Adams went to the Wake County Register of Deeds to ask, “WTF?” he learned that the office doesn’t check the validity of the change of deed. “Nobody verifies the notary. Nobody verifies who owns the house that’s trying to be transferred to a different owner,” Adams said about what he learned during his visit. Although Adams proved to the Register of Deeds that he owned the home, he was told that they can’t and won’t cancel a false deed once it’s filed. Adams has to hire to file a civil suit against this woman.
In response to the understandable public reaction to this story, the Wake County Registry of Deeds released the following statement:
“The Register of Deeds office is taking this situation very seriously, and is committed to assisting the homeowner in any way possible within the scope of the law. Under North Carolina law, Registers of Deeds are statutorily obligated to accept and immediately register documents in conformity with G.S. 161-14. The Register of Deeds is not required to verify the legal validity of a deed when it is presented for registration, nor are they required to verify the credentials or legal standing of the notary or drafter of the document (G.S. 47-14). With more than 500 documents processed through the Wake County Register of Deeds office daily, it would be impossible to verify the legitimacy of each document or the credentials of each notary, nor does the Register of Deeds office have access to a database of commissioned North Carolina notaries to check against. Register of Deeds staff are not attorneys and are explicitly barred from giving legal advice or from acting as an attorney in verifying a document. As soon as the Register of Deeds office became aware of the fraudulent deed, it alerted the Tax Administration office that no tax information for the property should be changed. Register of Deeds staff also immediately notified and is working with the Wake County Sheriff’s Office. The homeowner was also encouraged to file a police report. The Wake County Register of Deeds office offers a free fraud alert system. When documents are recorded with a name that is being monitored, the property owner will be immediately notified that an action has taken place on their property. In this particular situation, the homeowner’s name was not included as the drafter or the Grantor or Grantee on the document, so the alerts were not triggered. The document also hasn’t been indexed in the homeowner’s name. You can learn more about the free fraud alerts here. Because the deed has been recorded, the Register of Deeds office does not have the authority under North Carolina state law to remove the document from the record without a court order. Wake County will gladly cooperate with any criminal law enforcement investigation or civil proceeding that is initiated on the homeowner’s behalf.”
Well I’m glad the Register of Deeds office is taking this situation seriously.
This is ridiculous, and apparently how the system operates in othe states as well, maybe all of them. The lawyer I contacted about this said, “Oh yeah, this is loophole, all right. It could happen to me , to you to anyone, at least in Virginia. You can pay money for a service that claims to protect you, but the state governments won’t do anything.”
Ethics Alarms 
Arson
Identity Theft
now this… stealing properties through an opening in the system
All weird crimes among others that make me curmudgeonly enough to wonder if Life Imprisonment or the Death Penalty should apply to more than just murder…
I’ve heard of this scam before and it drives me insane that a homeowner doesn’t have *physical* possession of the deed to their home – or at least the bank that the homeowner is paying mortgage to doesn’t have physical possession of the deed.
Yes, we should apply the death penalty to more crimes.
I just sold a property and I still have physical possession of the abstract. It is the original abstract going back to before statehood. I purchased the vacant lot by a quitclaim and the owner gave me the abstract. I paid to have it updated. When I went to sell the lot, I repeatedly asked them when they wanted the abstract and the title company eventually said they didn’t because they already had it. I don’t know what they actually have. I would be interested to know.
When I sold my first house, the title company couldn’t find the title. Luckily, I knew where it was. Yeah, the title companies and abstract storage are a scam. Why can’t they just do a system like they have for cars? You rarely hear of people doing this for cars.
I am familiar with this and usually happens when the grifter files a quitclaim deed on the property.
It would make sense that the law should hold the notary equally criminally and civilly liable along with the grifter.
The simplest solution would be to create a process to place a document on the deed preventing any transfer without the document being released by the current owner or a court order. This would be no different than a freeze on credit applications by those who steal identities for that purpose.
Apparently, fake notary stamps are easy to get on the internet. One of the issues is that the state wasn’t even verifying the notary stamps.
If this news item becomes popular they will be processing way more than 500 documents daily when everyone and their dogs files fraudulent deed transfers in the hopes of bagging a free house.
Just wait until the non-english speaking border traversers learn about this! Land of opportunity indeed.
They do know this.
See also–squatting law and it’s ability to transfer ownership.
It’s a good thing we have to go through all the steps to verify our entire life history and economic status to buy property, plus pay money to the government to “assist” in the buying of the property, and pay taxes each year for the privilege of owning the property, and pay other taxes that support government employees for other items related to owning property, so we can receive the kind of outstanding service provided by the government in assisting us when situations like this occur.
The actual homeowner should feel warm and fuzzy inside at the level of service he’s getting from his local government.
I don’t understand why he doesn’t file a change of deed like she did. Wouldn’t they then be forced to process that the same way? She didn’t have to hire an attorney or go to court to take it out of his name. Why can’t he do the same and get it back in his name? What I get from this is it is OK when scammers do it, but a responsible taxpayer can’t. Yet again, the government works with criminals to fleece the taxpayer.
The applicable Arizona law, which, I suspect, is a model used in most states:
33-420. False documents; liability; special action; damages; violation; classification
A. A person purporting to claim an interest in, or a lien or encumbrance against, real property, who causes a document asserting such claim to be recorded in the office of the county recorder, knowing or having reason to know that the document is forged, groundless, contains a material misstatement or false claim or is otherwise invalid is liable to the owner or beneficial title holder of the real property for the sum of not less than five thousand dollars, or for treble the actual damages caused by the recording, whichever is greater, and reasonable attorney fees and costs of the action.
B. The owner or beneficial title holder of the real property may bring an action pursuant to this section in the superior court in the county in which the real property is located for such relief as is required to immediately clear title to the real property as provided for in the rules of procedure for special actions. This special action may be brought based on the ground that the lien is forged, groundless, contains a material misstatement or false claim or is otherwise invalid. The owner or beneficial title holder may bring a separate special action to clear title to the real property or join such action with an action for damages as described in this section. In either case, the owner or beneficial title holder may recover reasonable attorney fees and costs of the action if he prevails.
C. A person who is named in a document which purports to create an interest in, or a lien or encumbrance against, real property and who knows that the document is forged, groundless, contains a material misstatement or false claim or is otherwise invalid shall be liable to the owner or title holder for the sum of not less than one thousand dollars, or for treble actual damages, whichever is greater, and reasonable attorney fees and costs as provided in this section, if he wilfully refuses to release or correct such document of record within twenty days from the date of a written request from the owner or beneficial title holder of the real property.
D. A document purporting to create an interest in, or a lien or encumbrance against, real property not authorized by statute, judgment or other specific legal authority is presumed to be groundless and invalid.
E. A person purporting to claim an interest in, or a lien or encumbrance against, real property, who causes a document asserting such claim to be recorded in the office of the county recorder, knowing or having reason to know that the document is forged, groundless, contains a material misstatement or false claim or is otherwise invalid is guilty of a class 1 misdemeanor.
Having practiced real estate law for twenty years, I guess I’m biased to think the system works. I’ve used this statute to great effect on behalf of an HOA we’re members of. Of course, members of the public would have to hire a lawyer. So there undeniably is that. But in any event, recorders simply record what’s presented to them (digitally, now!). Recorders are not title insurers. The last thing we’d want would be the government insuring title. Sheesh.
Old Bill said most of what I wanted to say.
It is not the job of the Recorders Office to verify title; having said that, Minnesota has a great deal of Torrens property in which the State does establish title to land.
And, that is a good thing.
Yes, it creates the possibility for this very sort of problem. Yes, it may require a lawyer to fix (buy your title insurance everyone). But, once the problem is identified, a simple filing on the property would create a cloud on title that would gum up the works. But, yes, quieting title would likely require a lawyer. But, this is really no different than most cases that require a lawyer. Resolving disputes is one of the things lawyers do (yes, they create disputes as well).
But, given my inside knowledge, I am a bit skeptical of those “title security” subscriptions. You pay for something that will likely not harm you. Kind of like most insurance policies.
-Jut
That’s funny, Jut. The Torrens System. Surely, I heard of it in Property, but it was just a factoid. You learn so little in law school and so much as you begin practicing.
I have read several stories about this happening now. It seems to be spreading.
A big problem is that once the deed is in their name, the people can take a second mortgage on the property, not repay it, and the house gets auctioned. The legal fees to fix that are beyond many people’s means and their house is indeed stolen from them.
A second issue is when a vacation home or vacant land is fraudulently redeeded and then sold to a third party. The legal fees can easily exceed the value of the property. In the stories I have seen, many of the perpetrators are from overseas and all t his is being done by e-mail and other electronic means. You will never recover money from them.
https://www.atlantanewsfirst.com/2024/01/16/is-it-hard-steal-your-home-georgia-experts-say-no/
https://nypost.com/2024/04/01/real-estate/deed-fraud-is-on-the-rise-heres-how-to-protect-your-home/
https://www.yahoo.com/news/oklahoma-woman-nearly-had-her-212724672.html
This sounds weird to me. If someone obtains title to a piece of real property fraudulently, anyone purporting to have obtained title to the property or a lien on the property from that someone is simply shit out of luck. The owner of record can clear his title and retake possession if anyone’s taken possession and the fraudster, and his vendees and lenders get what the little boy shot at insofar as the real property is concerned. Again, see the model statute above. It’s pretty heavily weighted in favor of the legitimate record owner. It’s probably as heavily in favor of the victim as you’ll see in any statutory scheme. A stern letter including the relevant provisions of the statute usually gets a quick, responsive, reply from anyone other than an outright crook. Crooks will likely have to be taken to court, but the case should be pretty darned straight forward and dealt with by summary judgment.
Capital punishment.
If I had to guess, I might suspect that this common deficiency in security dates back to times when the county clerk knew every lawyer, and maybe every property owner, in the area, and would recognize an attempted fraud. They need a better system these days, but that would likely entail more employees and expense in large metro jurisdictions. A hold on a deed filing pending a response to a registered letter to the party on record as responsible for property taxes might be one way to start.
There are other lurking dangers in the records. People worry about online data breaches, but some legal filings contain social security numbers and other personal info (and the clerks will tell you the same thing as in this case…they can’t delete, obscure or or change that info). Some of us are old enough to remember when it was common to engrave your SS# as an ID on valuables, to aid in theft recovery, etc.; now it’s just another opening for fraud. I’ve had mine polished off the back of a few watches.
In most areas, property records are searchable online now, and it doesn’t hurt to check yours every month or so. There are services you can pay to monitor this, but I’m not sure if they offer much more protection than giving notice.
If you have an older relative for whom you feel some responsibility, even if they’re generally “of sound mind”, you might want to arrange to keep an eye on some of their legal & financial records (bank and credit card statements, property tax status, etc.). Ask me how I know.
Actually, I’ll tell you about one, since it also involves a bit of corporate bureaucratic absurdity. As executor of my mother’s estate, I came across a few monthly automatic drafts (from checking accounts) for services that should have been ended earlier. One of these was for premiums on type of (probably unnecessary, anyway) health care policy for my father, who had died several years earlier. Luckily, there wasn’t a problem getting the insurance company to refund the payments made after his death. The absurdity was that their refund came as a series of 90-something individually written and mailed checks covering each month refunded. I had to open, endorse, and note on a string of deposit slips, every single one.
it was the year 2022. I was in line at our local tax office waiting to sign my annual homestead exemption form. I over heard the lady in front of me asked to see the the allotment of her property taxes. The clerk provided a lsit which included an apportionment of the her (mine and everybody’s) property tax went to support a HOME FOR CIVIL LAW VETERANS. When the lady asked why are we allocating money for veterans of a war that ended 157 years afo, she was told “that is the Law”. When asked how do we stop allotting this the resposne was a shrug. I wrote our municipal authorities . when i got home. it has been two years, no resposne, yesterday I returned for the same annual visit. I inquired ho my property taxes were being allotted. i was presented withthe lsit that still list CIVIL WAR VETERANS HOME.
It may not be that bad. Are you in Missouri? The last Civil War widow didn’t die until 2020, Helen Viola Jackson. So, next time a ‘temporary’ government program (such as ones for Civil War Veterans) is proposed, remember how long such a program may last.
“Nothing lasts longer than a temporary government program.” – Ronald Reagan
He had a bunch of great one-liners, didn’t he?
She was born in 1919. Married a 93 year Union veteran, who she was caring for , when she was 17 in 1936. He died in 1939. So she herself was never a aprt of the war expereince.
She qualified as a widow becausr of how the law was written.
Helen Jackson never applied for the widow’s pension. Nobody outside the families even knew about the marriage until three years before her death.