Fear sells - particularly among old people.
We stopped by a place to get a lobster roll ($25 if you can believe that!) and they had televisions playing all over the restaurant - which is typical of many restaurants today, chain or otherwise. We're talking six televisions, at least.
Three of them were playing an informerical starring Newt Gingrich, selling something called "Home Title Lock" to protect your home from being stolen from you! Maybe you missed the bus this morning, but the scenario goes down like this: Someone "buys" your house by recording a fake deed, with fake signatures and a fake notary. They then go to the bank and get a mortgage on the house, and take the money and run away. You are stuck paying off the mortgage.
Well, not exactly. You see fake deeds are not enforceable, and a mortgage obtained through false pretenses is not your problem, but the bank's. It might create some minor hassles for you, to straighten things out, but no one is taking your house away or making you pay off someone else's mortgage. But hey, let's not ruin Newt's fine narrative!
For only "pennies a day" (and I guess 100 pennies is "pennies a day") you can sign up for this "Home Title Lock" to prevent the thieves from stealing your home! Well, except that it doesn't really prevent anything. What they agree to do is monitor your local County's register of deeds and then send you an e-mail if anyone files any document related to your home. You get a notice of this, you are still liable to straighten things out with the bank. And chances are, you'll get notice of this in due course, as the scoundrels never make a payment on the fraudulently obtained mortgage and the bank tries to foreclose or contact you.
I suppose an earlier notification would be handy, but it doesn't solve the problem, merely notify you of it. And is this a common problem? You read about it in the paper, but is it a trend?
Likely not. For the very simple reason that banks hate walking away from hundreds of thousands of dollars in fraudulent mortgages. They, or their insurance company, not you, are on the hook for the balance. It is like these other incidents of "identity theft" which are hyped in the press. Someone is going to take out a loan in your name! You'll have to pay it back! No, you won't.
Banks who lend money to fraudsters impersonating you are the ones who made the mistake - and have to pay. It may be a "hassle" to straighten things out, but you are not liable for the loan amount. And guess what? Banks are tired of writing off bad loans and are taking steps to insure that the money they do lend, is to a real person or an actual homeowner.
The press reports breathlessly that "identity theft" is on the rise! But by including ordinary credit card and debit card theft in these numbers, they can make the trend seem more alarming. Credit and Debit card theft are a problem, but in most cases, you can just click a mouse and the problem goes away. With Debit cards, it may take a phone call. Big deal.
And the cases of actual "identity theft" where someone actually impersonates you and takes out a loan in your name? Well, in many cases, it is your friends and family members doing this (find new friends, avoid those family members) as they may resemble you and have access to your driver's license and other data.
For example, I recounted before about my friend whose husband, while in law school, decided to take up a crack cocaine habit, and spent the mortgage payment on crack. She left him and later divorced him. He's now in jail. As a nice going-away present, he took out a loan, forging her signature as a co-signer. Nice fellow. But she wasn't liable for the amount of the loan - although proving this, in a situation where you are married, is a little harder to do.
How can someone record a deed in your name? Well, the recordation system isn't a system that determines ownership of properties, it merely records, in a big book, a file, a microfische, or a computer system, copies of documents purporting to transfer ownership or place a lien or mortgage on a property. For example, we had recordation system at the Patent Office - Assignment Branch - that recorded ownership (assignments) of Patents and Pending Applications. As I noted to more than one client, Assignment Branch will record a roll of toilet paper, provided you fill out the cover sheet properly.
And in more than one instance, people have filled out these sheets incorrectly - getting one digit wrong - and you see an "assignment" listed for your Patent or Application that shouldn't be there. They own your Patent now! Well, relax, they don't. It is just an error and in order for a contract to be legit, is has to be legit - there has to be a "meeting of the minds" and a slipped number isn't a meeting of anything. Similarly, an attempt at fraud isn't a valid contract, just because your county clerk recorded it - as is their job. Like I said, they'll record a roll of toilet paper, if it has the correct cover sheet on it - just like the Patent Office.
So old Newt uses this fear to sell this service. Implying that somehow a fake deed with a forged signature (that might not even be your name!) with a forged notary stamp, is going to have legal effect in the transfer of ownership of your home. I'll give you another example which illustrates why this isn't true. When the Island Authority extended our leases, they noted that our deed was in error - it had the wrong plot number on it. Technically, the deed was to our neighbor's house, and the fellow we bought our house from still owned ours (Funny thing, the tax people had no trouble sending us the tax bill!).
This didn't mean we owned our neighbor's house, only that the deed was defective. The seller signed a new deed and this was recorded and the error corrected. Life goes on, without fanfare. Suppose the seller was dead or refused to sign a new deed? Well, in the latter case, he could be sued. And since was a Real Estate Agent, he would have lost his license. In addition to that, we had an owner's title policy to protect us. The closing attorney who made the error would be on the hook as well, and of course, he has malpractice insurance. There were layers of protection here. Not to mention the bank with which we had a mortgage at the time would have intervened. But no, you can't just file a deed and take possession of someone's home.
I mentioned before this "sovereign citizen" nonsense. Someone tried to "squat" on an abandoned property and then take possession by filing some nonsense "sovereign citizen" deed they typed up on their home computer. It didn't work. Recordation of a deed means just that - it is recorded. It is not a judgement by a legal authority that it is valid.
So why do we record deeds? Recordation of a deed serves to put others on notice that the property has been transferred, that a lien has been filed, that the property has been mortgaged, or whatever. A bank loaning money to someone would check the County clerk's office to see if the property is already mortgaged and also to see who is the current owner. A sloppy bank might go along with a fraudulent deed recordation, but the onus is upon them, not you, to prove their claim.
And yea, that would be a hassle, if someone did this to you - but it doesn't mean you lose your house or have to pay off someone else's loan. And this "service" provided by Newt Gingrich isn't going to prevent that hassle - all they agree to do is notify you of any change to your recordation status - which is a public record they can access online. In fact, you can access this data online. For example, I could search deed records for the State of Georgia on a Statewide record base - but not all counties participate! My local county had an online record of property transfers. I was able to check it - I still "own" my house.
It used to be, at one time, that a lot of actual records (images) were available online, but in recent years, you have to request records, in paper forms. So I am not sure this "home title lock" is of any use. And others, even Fox News (a big Gingrich fan!) don't seem impressed, either.
Why Newt, why? And why do celebrities get involved in these things? Tom Selleck (Sellout?) selling worthless "burial insurance" (Parodied brilliantly by Michael Douglas on The Kominsky Method) or Tom Bosley before him? Well, they get paid a lot of money for what amounts to less than a day's work - maybe not even an hour or so. So they take the money. And many of these celebrities, even after earning millions, end up broke, because they spend it even faster than they make it. Hard to imagine Tom Selleck being broke enough to sell burial insurance. Not so hard to imagine Newt Gingrich doing anything for a buck. And think of it - some folks thought he could be President! Of course, the bar for that has been lowered a lot since then.
It is sad that these celebrities sell their credibility like that. Some of them need the money and they go for it. And these scammers out there, they know old people will trust an older, white, male celebrity who is a father-figure. In fact, you can kind of sort of spot these scams, again, from 100 yards away, by how they are presented. When they use a celebrity endorser, one who played a trustworthy father-figure type on television, or who has a reputation among the older, conservative, set, well, you can pretty much figure out, it is a scam, without even looking at it in detail.
UPDATE: A reader writes that Rudolph Giuliani is also doing ads for this home lock thing. Not hard to figure out why he's doing it. He needs the money. One wonders whether the people behind this are salting the pot. In other words, creating these incidents where someone tries to file a false deed in order to create fear in people. It wouldn't be hard to do, you just contact a few of your underworld friends to do this for you.
