It's going to be a lawsuit moment: class actions slated to restructure real estate market

The multi-billion dollar title insurance industry, combined with a network of county recorders across the nation, is supposed to maintain the integrity of the nation’s property transactions.  But, many people across the nation say that not only has the network been compromised, but some of the transactions are so tainted that they are no longer valid as accurate renditions of who owns what, making it impossible to legally insure the title.

The deed, that piece of paper upon which your property rights hinge, has been compromised in many states.  Deed forgers have generated a multi-million dollar underground network of theft by document deception, which has cost American taxpayers billions of dollars in property losses.  And, we’re not even talking about the contributions of crooked county government personnel, yet.

Horror stories about fraudulent deeds abound.  Here’s one that’s particularly nasty. In one case of  alleged deed fraud, an elderly woman’s home was stolen right out from under her, by people she’d never even seen.

The elderly victim resides in Georgia and owns a home on the 1500 block of West Flores Street in San Bernardino that she was trying to sell. When the victim’s son was listing her property for sale, he discovered that her property had been fraudulently transferred to a female subject with no connection to the victim’s family. The forged deed had been filed and recorded at the San Bernardino County Recorder’s Office and the suspects were attempting to refinance the property for $160,000 through First American Title Company in Santa Cruz, California. (Press Release: San Bernadino Prosecutor’s Office)

In November, Miami-Dade Mayor Carlos Alverez announced a major crackdown on mortgage fraud.   The state of Florida has some of the highest foreclosure rates in the nation, many attributable to mortgage fraud.  The mayor noted that the losses are huge.

Mortgage fraud is a substantial problem in our County with more than 200 reported incidents of mortgage fraud and an estimated $50 million in losses to lenders and other victims.  The recent Florida State Statute 817.545 went into effect on October 1, 2007, making it easier to crack down on mortgage fraud, making all parties involved in Mortgage Fraud subject to prosecution. (Press release) 

Just think, that $50 million dollars in one county, lost to mortgage fraud via fraudulent deeds.  Here’s another one:

Queens District Attorney Richard A. Brown … announced that a suspended Richmond Hill attorney and a licensed Queens Village real estate broker have been charged with selling the house out from under an elderly Jamaica, Queens, man who had been hospitalized after suffering a stroke and then repeatedly flipping the property to drive up the price. The suspended attorney is also charged in a separate real estate fraud scheme in which he fraudulently obtained the Queens house of a U.S. Army sergeant serving overseas. (mortgagefraud.org)

While the nation is concentrating on the problems caused by so-called subprime loans, there is a subterranean culture of title counterfeiting, deed forgery, identity theft and collusion, where crooks not only forge loan applications, falsify income, and steal identities—they also forge deeds as well. 

An Ohio attorney was disbarred, allegedly for a cornucopia of crimes, including: (allegedly) falsifying the deed to an elderly client’s farm, then transferring the property to herself, then giving the farm to her client’s church, and then taking charitable deductions for the gift. (Toledo Bar Assn. v. Cook)

Across the country in Colorado, another attorney was disciplined for “serious misconduct” in connection with the reported falsification of a notary signature and seal on a Deed.  

People v. Sheffer, No. GC98A112 (consolidated with GC98A113)

The Presiding Disciplinary Judge and Hearing Board suspended the respondent, Mary Jody Sheffer, for two years for failing to segregate funds in violation of Colo. RPC 1.15(c), for intentionally falsifying a notary signature, and for improperly using a notary seal of another on a Deed of Trust and Request for Release of Deed of Trust and Release, in violation of Colo. RPC 8.4(a), Colo. RPC 8.4(b), Colo. RPC 8.4(c), and Colo. RPC 8.4(d). Although the presumptive sanction for such serious misconduct is disbarment, substantial mitigating factors reduced the sanction to a two-year suspension.

We are looking at a possible trillion dollar mortgage meltdown over the next few years.  This is a financial tsunami which has dire consequences for property owners, city taxing authorities and the nation as a whole.  And, while some limit their investigation to the “subprime” mortgage industry, there is a broader culture of greed, graft, conspiracy and collusion which threatens the nation’s economic well being.

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