Deed fraud is an increasingly sophisticated scam, often targeting vacant or unoccupied properties, and it’s affecting property owners nationwide, including here on Cape Cod. In cases of deed fraud, scammers use false documents to claim ownership of a property, often selling it quickly for cash and disappearing with the proceeds before anyone realizes what happened. The scam is particularly challenging to detect and prevent, as it can involve forged documents and impersonation tactics that slip past even experienced title companies.
For Cape Cod’s second-homeowners, this scam poses a unique risk. Properties that remain vacant for part of the year can be prime targets, and fraudsters may attempt to capitalize on homes that are not consistently monitored. By the time the actual owner discovers the fraud, months—or even years—may have passed. In one notable Massachusetts case, a title lawyer spotted a scam during an all-cash transaction, raising awareness for property owners and title professionals to stay vigilant, especially with vacant land and remote transactions.
To combat deed fraud, industry groups like the American Land Title Association (ALTA) and the National Association of Realtors are advocating for solutions and providing resources to help protect property owners. Recommendations include more stringent identity verification processes, continuing education for real estate professionals, and promoting public awareness. Some states, such as New York, are taking legislative action to prosecute deed fraud, classifying it as grand larceny. Additionally, enhanced title insurance policies can offer added protection by covering potential fraud after the title transfer. For Cape Cod homeowners, this extra layer of security could prove valuable in safeguarding property and ensuring peace of mind.
To further support fraud prevention, the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN) will begin requiring identity verification for all parties in all-cash transactions starting in December, regardless of transaction size or location. This new measure will help deter criminals who use real estate for money laundering, making it essential for property owners to stay informed and consider additional protections like title insurance, especially in high-risk, high-value real estate markets like Cape Cod.
