Forgery In Real Estate Transactions: A Growing Concern

It isn’t just that it is illegal. Forgery in real estate deals can result in a slew of problems. Unfortunately, you may have to learn it personally. Real estate and forgery

Two adjacent states have recently reported on bogus claims involving deed transfers. Authorities in Pennsylvania have charged a man from Philadelphia with faking signatures on deeds in order to transfer six properties to his name. None of the legitimate property owners were aware of the transactions. Meanwhile, another Philadelphian is said to have made a six-figure profit from house flipping. He is accused, however, of first signing the names of deceased persons in order to claim possession and sell it.

In New York, a 51-year-old man was charged with faking documents related to a vacant $1 million brownstone. The elderly property owner refused to sign any papers or permit a deed transfer once more. These sorts of forgery charges involving real estate transactions are unfortunately not uncommon. They happen all around the country, including New Jersey. In fact, some forgery-related allegations may catch you off guard. Or it might not, especially if it messes up your property title.

Other Claims of Forgery in Real Estate

A forgery claim may develop at or before your real estate closing, which is a sad reality. Consider the following circumstances when joint owners decide to sell their property.

Both owners must sign off on the deed transfer, as you might expect. However, it is not always easy for one of the sellers to show up at the closing table. Instead, someone else comes up in their place, claiming to have signed a power of attorney on behalf of the absent owner.

A power of attorney allows one joint owner to complete a real estate transaction on behalf of both partners in many instances. In principle, it’s a terrific concept. What happens, though, if the signature on the power of attorney is forged?

Something else could happen in the meantime. The New Jersey Appellate Division recently issued a decision in a case involving forgery in a real estate transaction. The case highlights how fraud claims can also affect commercial title transfers.

Improper Mortgage Discharge

On January 8, 2019, the court decided Chicago Title Ins. Co. v. Union Ave. Holding, LLC. The case’s specifics are intriguing because they are based on allegations of fraud and violation of covenant. The plaintiff, in this case, is Chicago Title Insurance Company, as you may have noticed. They filed the action, however, on behalf of its insured, a firm called Golden Union. Golden Union purchased an apartment complex from Union Avenue Holding for $1.4 million.

In real estate deals, it is common to condition sales on a number of things. One of them is documentation that all property liens, such as outstanding mortgages, have been satisfied. In this case, the seller-provided documentation of the property’s $1.1 million mortgage being discharged. Chicago Title Insurance agreed to issue a title insurance policy as a result. This instance demonstrates the importance of title insurance.

The buyers discovered they’d been deceived four months after the closure. On the mortgage discharge paperwork, the signatures were forged. The court ultimately ruled that there was “ample credible evidence to support [plaintiff’s] claims based on the breach of the warranty covenant since [defendants] transmitted title knowing the… mortgage remained as an encumbrance on the property.” The failure to discover the disparities at the close is also addressed in this case. This case shows the significance of protecting your investment as Chicago Title Insurance seeks a return for the money it paid.

Real estate is a precious asset that, regrettably, is frequently the target of forgeries and fraud. The public documents used in title searches aren’t perfect, and it’s sometimes difficult to spot cases of fraud and forgery in land records. In real estate, title insurance is required to protect both lenders and buyers from fraud and forgeries.

Real estate fraud and forgery perpetrators can be incredibly cunning and persistent, putting buyers in serious danger. Forgery and fraud are hidden risks that, despite the best efforts, can go undiscovered until after the closing, therefore it’s critical to invest in title insurance to protect your investment.

There have been various cases when fraud or forgery has resulted in title claims. People have been caught forging their ex- spouse`s signature on key documents in the past. The party whose signature was forged files a claim against the title after the property is sold, claiming that the property was not properly sold.

Fake documentation, such as deeds, can also be used to commit fraud. A skilled con artist might sell a home they never possessed, and the problem could not be discovered until after the sale is completed. When this happens, the property’s real owner can demand that the new owner remove the premises immediately because it was not legally purchased or transferred.

Protection Against Fraud and Forgery

To protect their investment in the event of a problem or claim regarding the title, mortgage lenders nearly usually require buyers to get lender’s title insurance. It is crucial to note, however, that the buyer is not protected by this policy. We recommend getting an owner’s title coverage to protect your investment.

Forged Deed & Loan Documents

A falsified deed is one that has been signed by someone claiming to be the owner without the knowledge or approval of the genuine owner. Unscrupulous persons who falsely represent themselves as property owners in order to get loans against that property are more common than ever before. The lender will eventually foreclose on the property, and the forgery will be discovered by the rightful owner. Many people have come to Sterile Pro for help in this stressful situation. We were successful in many cases because we used forensic techniques to show lenders and the court that the falsified documents did not bear our client’s signature. We strive to invalidate the falsified instrument after proving that our client is only an innocent victim of fraud.

Please get in touch with us.

From a few perspectives, fraud cases involving real estate are fraught with legal concerns. We assist buyers and sellers in avoiding problems and resolving them when they arise. Make an appointment with Sterile Pro for legal help on your real estate transactions.