How thieves can sell a house in Arizona without the knowledge of the owner
Download mp3 (10.59 MB)Imagine if your house, or land you owned, was put up for sale and then sold — without you ever being aware of any of it. That’s been happening in Arizona and elsewhere, where criminals steal identities and falsify documents.
Arizona lawmakers earlier this year did approve a new title alert system. Residents need to opt in to get an email if anything is recorded against their name. Most counties have already put the system in place.
Susan Nicolson is commissioner of the Arizona Department of Real Estate. The Show spoke with her about what her office is seeing, in terms of people who own property seeing it go up for sale without their knowledge.
Interview highlights
How can a house go up for sale without the knowledge of the owner?
SUSAN NICOLSON: ... In the industry it's been identified and sort of labeled and called deed fraud or title theft. And, unfortunately, we hear about two to three cases a week that make their way to the Department of Real Estate where our licensees have in a proactive manner, identified that a person is impersonating a seller.
So it involves identity theft and they try to involve real estate licensees to actively market and procure a buyer in order to sell someone else's property and steal all of the equity. And I can tell you, Mark, it is a devastating crime. Property ownership is the No. 1 way that Americans build generational wealth. And when a criminal comes along and steals those properties, it devastates not only the current homeowners, it devastates those, those families, those generations to come because it's a tremendous amount of wealth that's being taken.
Are you finding that this is happening to folks living in houses? Is this happening to people who own, who own land? Is it happening to both?
NICOLSON: It's happening to both. And so what we initially saw early in us realizing this was happening — and to be clear, this is happening across the nation. This isn't an Arizona-specific thing. But as industry professionals, title insurance companies, escrow officers licensed real estate brokers all started to really raise the red flag. We realized that initially criminals were targeting houses that were sitting inside of probate, maybe out-of-state ownership was a common theme that we were able to identify and vacant land was another thing that was easily identified. Vacant land, particularly, because you don't need somebody to give you access for you to go and take marketing pictures. It's just a piece of land that's sitting there. So, vacant land was the lowest lying fruit and the most commonly attempted theft that we were seeing coming into the department.
So if I am a homeowner, and this is happening to me, am I able to try to cancel the sale or do something to stop it so I can stay in my home?
NICOLSON: If you can find out about it before it closes escrow, then absolutely. Title companies will halt their process of ensuring the properties, escrow officers will stop the escrows. There are fraud prevention checklist at every level of real estate transactions now. This industry is on very, very high alert for consumers. For property owners out there, what I suggest doing is setting up a Google Alert with not only your name but any property addresses that you own. Because if a licensed real estate agent is hired to sell a piece of property, it typically goes into a multiple listing service, that then uses a system called IDX to broadcast it out to 10, 20, 100 different websites out there to market that property to the largest possible audience of buyers.
And if you have a Google Alert set up, then your advertisement of your property that's being sold will be sent to you as an alert, that this is on the world wide web being advertised for sale. And you would have the opportunity then as the bonafide owner to contact that real estate professional and say, "Hey, I own this, and I'm not selling it."
You mentioned that the different entities involved in the sale of land or in the sale of real estate are on high alert. Are there things that they are trying to do to stop this from happening?
NICOLSON: Oh, absolutely. A lot of real estate licensees have taken it upon themselves to step up and say, "OK. Hi, thank you for reaching out to me. I don't know who you are." So you're not a seller who is personally known to the real estate licensee. And a lot of them are saying, let me see your identification. And some of the fake IDs that the department has seen. — if you had asked for the ID upfront, you would certainly realize that the seller of the property wasn't, you know, John Travolta from his days in "Grease," right? Like you can realize that this is definitely a fake identification. But I feel like the criminals have become more sophisticated with falsifying that those types of government documents.
And it is one part on the real estate licensee. There's some areas where licensees are sort of stepping up what they're doing at the very beginning of a sale, but it's not something that I can regulate. It's not something that I can, at this time, statutorily say real estate agents must check a seller's identification and verify you're working with a bonafide seller.
It's something that I hope the Legislature will take action in this coming session and say, yes, real estate agents check a form of ID. You're required to show your identification in order to use the city landfill. I think it's reasonable that you could have to show an identification to a licensed real estate agent if you're claiming to be the owner of a piece of property.
So, but that would take legislative action. I don't have the regulatory authority to require that of the licensees. I can tell you that the American Land Title Association and the escrow officers out there are working on a fraud prevention checklist and they check a number of different areas to try and verify. Are they working with the bonafide owner of the piece of real property? And a lot of these fraudsters are caught right there at the escrow process, right there at the, sort of, gathering together the information to issue title insurance. The escrow companies have become quite good at identifying when there is a fraudster.
And so all of the parts are working as independents right now, but we don't have anything that is a requirement in legislation of title insurance companies or real estate licensees to 100% of the time exercise these best practices.
