Ahoy, real estate professionals! In an era of technological advancements and remote transactions, the world of real estate has witnessed an unsettling trend – the rise of “Title Pirates.” These cunning scoundrels are wreaking havoc on real estate closings, jeopardizing properties, and leaving homeowners at risk. In this blog post, we’ll delve into the treacherous world of title pirates and explore how real estate professionals can protect their clients from their cunning schemes.

What Are Title Pirates?
Title Pirates are individuals or entities engaging in title fraud by attempting to create the illusion of legal ownership over a piece of real property when they have no rightful claim to it. They often do so by recording fraudulent or forged documents, such as deeds or liens, purporting to convey title to the property. To achieve this, title pirates typically use falsified documents like forged driver’s licenses or Social Security cards to impersonate property owners or authorized representatives of owning entities.

Their motivations vary, but title pirates often seek to profit by securing loans on the properties, renting them out, living in them temporarily, or attempting to sell them to unsuspecting buyers. The implications of their actions can be financially devastating for homeowners and lenders.

The Escalation of Title Pirates
Title piracy has become increasingly common since 2020, particularly with the growth of remote and mail-away closings, as well as remote notarization – all of which gained popularity in the wake of the COVID-19 pandemic. South Florida, in particular, has seen a surge in title piracy in recent years, but this issue is not limited to a single region.

Who Do Title Pirates Target?
Title pirates target various types of properties, but vacant parcels of land are particularly appealing to them. These properties are often unoccupied and are less closely monitored by out-of-state owners, making them prime targets. Once they’ve established a claim to these vacant properties, title pirates may attempt to secure loans against them, misrepresenting the funds’ use as construction loans, only to abscond with the money after the loan closes.

Properties with recently deceased owners and investment properties owned by holding companies are also potential targets. Title pirates may employ forged quit claim deeds and powers of attorney to take control of these properties, using them for rental income, resale, or even as their own living quarters.

Protecting Clients from Title Pirates

As real estate professionals, your clients rely on your expertise to safeguard their interests. Here’s how you can protect them from the clutches of title pirates:

1. Attention to Detail: Scrutinize all documentation provided by the parties involved in the transaction to verify their identities and authority to execute documents. Any discrepancies or irregularities should be thoroughly investigated.

2. Multiple Forms of Contact: Request multiple forms of contact information from all parties and ensure that the provided details are valid.

3. In-Person Closings: If feasible, encourage in-person closings to reduce the risk of title piracy. When remote or mail-away closings are necessary, insist on using a trusted in-person notary.

What to Do if You Suspect Title Fraud

If you suspect that you or your client may have fallen victim to a title pirate’s scheme, take immediate action:

1. Contact an Attorney: Seek legal counsel to discuss the most efficient way to clear the chain of title.

2. Initiate a Title Insurance Claim: If you have title insurance, initiate a claim with your title insurance carrier.

3. Notify the Recorder’s Office: Contact your county clerk’s recorder’s office to report the fraud and take appropriate measures.

Other Real Estate Scams to Beware Of

In addition to title piracy, real estate professionals should be vigilant about wire diversion scams. Verify wire instructions, including bank and account numbers, over the phone before sending funds in conjunction with a closing to avoid falling prey to these fraudulent schemes.

In the ever-evolving landscape of real estate, vigilance and a keen eye for detail are your most potent tools in protecting your clients from title pirates and other scammers. Stay informed, stay vigilant, and help keep real estate transactions safe and secure.