Tip of the Month - August 2006

Protecting Yourself from Real Estate Fraud

Recently, the Orange County Tax Assessor provided some informative tips to heighten awareness among property owners of the dangers of real estate fraud. Unfortunately, fraud is on the rise throughout the county as criminals devise more ways to steal your home, real estate holdings, or the equity in your property.

The best protection against fraud is education. Understanding the types of fraud and identifying the warning signs can help protect you from damaging the marketability of the title to your property and prevent delays in your escrow closing which may occur while these complex title issues are resolved.

Common Real Property Frauds:

• Home Equity or Identity Fraud: A deed can be forged and recorded to give the appearance that another party has acquired the ownership of the property. The new "owner" uses the equity in the property as collateral to borrow money. When payments are not made on the new loan, the original, true owner could face foreclosure.
• Home Renovation and Mortgage Fraud: Homeowners can be left with partially complete or substandard construction when a contractor offers to do home improvement work or lenders offer special low rate financing but do not deliver as promised.
• Real Estate Investment and Foreclosure Fraud: Unsophisticated investors are persuaded to buy property for that is supposedly facing foreclosure. Forged documents are recorded which give the appearance that the property is being sold to avoid foreclosure.

Common Warning Signs:

• Missing Property Value Notice or Tax Bill: The Assessor mails the notices of property values in July, and the Tax Collector mails the bills in September. If you fail to receive a notice, phone the Assessor's Office for your county. If you do not receive a tax bill, phone the Tax Collector for your county.
• Notification That a Property Document Has Been Recorded: If you receive a notification from the County Recorder that a document has been filed against your property and you did not initiate the filing, try to determine who recorded the document. This information is typically found in the upper left corner of the document. Any suspicion of fraudulent activity should be reported to the local law enforcement.
• Loan Documents or Payment Books: Notify the lender immediately if you happen to receive loan documents for a loan that you did not initiate.
• An Investment That Sounds Too Good To Be True: Be suspicious of investment opportunities, do your research, and seek professional advice.

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