Strengthen Notary Laws To Curb Deed/Title Fraud, Say Prosecutors; Requiring Seller Thumbprints On Deed Transfers May Offer Partial Solution

The Associated Press reports:

• [W]ith a notary seal, criminals can steal the title to a house, take out a mortgage, drain the equity in the property and even give themselves power of attorney to access a victim's bank accounts. "Notaries really are the gatekeepers for fraud in real estate transactions, yet we don't put in the type of mechanism that would help law enforcement track down the crooks," said Dave Fleck, a former Los Angeles County prosecutor specializing in real estate cases.

• States have widely varying rules for becoming a notary public, many not requiring a background check. About 20 states don't mandate that notaries keep journals of their transactions, and even fewer require a thumbprint from home sellers when notarizing property transfers — a regulation recently enacted to help combat title fraud in the Chicago area.

• Philadelphia District Attorney Lynne Abraham said stricter regulations in Pennsylvania may have prevented [...] and the heartache of dozens of [...] victims [of a recent deed theft scheme], including owners who lost title to their homes and unwitting buyers who spent thousands of dollars on properties they never really owned.(1) Abraham said a thumbprint requirement might have deterred criminals posing as home sellers because they likely would not have wanted to leave behind evidence of their identities.(2)

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• A thumbprint requirement has been the law in California since 1996, providing an invaluable tool for tracking down forgers and also helping protect notaries from being victimized, Fleck said.

For more, see Tougher notary laws sought to curb house thefts.

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(1) In the scheme, ring members scouted for abandoned homes — the owners were dead or living elsewhere — looked up the property records and began the forgery process with the help of four notaries, prosecutors said. They then sold the homes, usually for a few thousand dollars, to unsuspecting families, many of them immigrants with little understanding of real estate procedures.

(2) Reportedly, the district attorney tried to add that mandate to legislation in Pennsylvania in 2000, along with a requirement to photocopy the ID cards of those seeking notary services. Her effort failed, partly because the Pennsylvania Association of Notaries said the proposals would be too onerous. Association president Marc Aronson said he believes such provisions would get more backing today. DeedZetaTheft