Elizabeth Shay, Esquire

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Tangled Title and Deed FraudHow to Protect
Yourself and Your Family

• Elizabeth Shay, Esquire
• Homeowners Assistance Program Coordinator
  SeniorLAW Center
• Roxane Crowley, Esquire
• Homeownership Attorney, Philadelphia VIP
• Susan Wysor Nguema, MSW
• Homeownership Advocate, Philadelphia VIP
• (Co-Author, Susan will not be presenting today)

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What does it mean to have title to a home?

• Title is the legal concept of property ownership.
• A deed is a legal document that confirms a
  persons ownership of property, or that the
  person has title to the property

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A Deed
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Why is it important to have title?

• Ability to enter payment plans for back real
  estate taxes and water bills
• Access to home repair programs for low-income
  homeowners
• Ability to take out a mortgage or negotiate
  modifications of existing mortgages
• Ability to sell the property
• Ability to leave the property to someone in your
  Will

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What is a tangled title?

• Tangled Title is a phrase used to describe
  problems related to legal ownership of real
  estate.
• If you live in a home and consider yourself the
  homeowner, but your name is not on the deed, you
  may have a tangled title.

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Types of Tangled Title

• Family Owned Properties (Title is in the name of
  a deceased relative)
• Lease/Purchase or Rent-to-Own Agreements
• Fraudulent Conveyances

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Family Owned Properties

• Problems occur when the homeowner passes away and
  family members continue to live in the home
  without transferring title.
• Living in a property, paying real estate taxes
  and maintaining the property does not make the
  heir the owner.

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Example 1There was a Knock on the Door

• Harvey owned a house and lived in it with his
  wife, Wilma. (Wilma was not named on the deed.)
  Harvey died unexpectedly and did not leave a
  will. Wilma continued to live in the house
  alone.
• 10 years after Harvey died, Wilma received court
  papers. The city was foreclosing on the house
  because of unpaid real estate taxes. Wilma
  called the city and was told that only the owner
  can prevent the sale by entering into a payment
  plan for the back taxes.

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Example 1There was a Knock on the Door (cont.)

• Wilma went to an attorney to have her name put on
  the deed to the house. The attorney explained
  that because Harvey did not have a Will, the
  state law controls how Harveys property passes
  after death. Harveys two children with Wilma
  and his five children from a prior marriage all
  have ownership interests in the property.
• The only way for Wilma to be the sole owner is to
  have all of the heirs transfer their interests in
  the property to her. Wilma has never met some of
  her stepchildren and has no way to locate them.

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Lease-purchase or rent-to-own agreements

• What is it?
• Buyer and seller agree that buyer will pay for
  the house in installments while living in the
  property. When all payments are made, seller
  will transfer title to the buyer.
• Why?
• An option for people who want to own, but dont
  have the credit or saving power to purchase
  outright or to obtain a mortgage.

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Example 2 Renee and Olivia

• Renee is renting Olivias property. Olivia
  offers to sell the property to Renee and will
  accept installment payments of the purchase
  price. Renee agrees and signs the installment
  sales agreement.
• Renee makes payments for 15 years and continues
  living in the property. Renee makes repairs and
  improvements to the property. After the final
  installment payment, Renee calls Olivia and asks
  when she will transfer the deed to her.

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Example 2 Renee and Olivia (cont.)

• Scenario 1
• Olivia tells Renee that she is willing to
  transfer the deed, but there is as a mortgage on
  the property which Olivia took out after Renee
  started making her installment payments. Olivia
  has been paying the mortgage but can no longer
  afford to do so once Renee stops paying her
  installments.
• Scenario 2
• After Renee makes her last payment, Olivia tells
  her the property taxes have not been paid and the
  city wants to sell the property.
• Scenario 3
• Renee has been making payments, but after nine
  years the payments start coming back in the mail.
  Renee drives out to Olivias house and discovers
  she has moved and Renee has no information where
  Olivia is now living.

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Fraudulent Conveyances

• Forged Deeds
• Contractor Fraud / Home Repair Scams
• Mortgage Rescue Scams / Equity Stripping

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Fraudulent Conveyance Defined

• Homes can be sold by persons pretending to be the
  owner.
• The true owners name is removed from the deed.
• The true owner must then prove, legally, that she
  owns the property
• The fraudulent owner can re-sell or mortgage the
  property
• How does title get stolen?
• True owner leaves the property due to temporary
  move, such as hospitalization, incarceration,
  military deployment, or death of owner

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Example 3 Thats MY House!

• Sam lived in the same house for 30 years. At 78,
  he was living alone and doing well until he had a
  bad fall and broke his hip. Sam had to spend 2
  weeks in a hospital and 1 month in a rehab
  facility.
• When Sam finally returned to his house, he found
  a family he didnt know living there -- the
  Kirbys. Mr. Kirby told Sam they bought the house
  from Jack for 200,000 three weeks ago.
• Sam contacted a lawyer and found out that Jack
  transferred the property to himself by forging
  Sams name on the deed. Then Jack sold the
  property to the Kirbys.
• The Kirbys do not want to leave the house and Sam
  has nowhere to go.

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Example 4 Bad Contractor

• Harry sees an ad in newspaper Make repairs to
  your home. No money down! He calls the number
  and arranges for Robert, a general contractor to
  inspect the home. Robert writes up a work order
  for renovations to the kitchen, bathroom and
  roof price 25,000.
• Harry has bad credit and cannot get a loan to
  make the repairs. Robert tells Harry not to
  worry, that he has a friend in the banking
  business who will loan Harry the money and take a
  mortgage on his house. A few days later Ben, the
  banker, calls Harry and tells him his bank will
  arrange a loan to Harry so the work can begin
  immediately.
• The closing is held in Harrys house. The loan
  documents and mortgage reflect that Harry is
  borrowing 33,000. A check for 25,000 is given
  to Robert for the renovations. The balance is
  paid to Ben as appraisal fees and closing costs.
  

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Example 4 Bad Contractor (cont.)

• The renovations start then stop. Robert tells
  Harry that his crew is working on another job but
  will return to the house in a few days. No one
  comes, and Harry calls Robert again. The calls
  are not returned. Harrys house has been torn
  apart by the contractors.
• Harry contacts a lawyer and is told that Robert
  is not a licensed contractor and has no business
  address his only contact is a cell phone and
  P.O. box.
• Harry now has a mortgage on his home which he
  must pay even though the renovations have not
  been completed and Robert has disappeared.
  

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Example 4 Mortgage Scam/Equity Theft

• Marco lost his job and cant pay his mortgage.
  While watching TV, Marco sees an ad promising to
  Save your home from foreclosure. Marco calls
  the number and a few days later Steve visits
  Marco at his house.
• Marco tells Steve that he should be returning to
  work soon and only needs a loan to tide him over.
  Steve agrees to help Marco for an immediate
  upfront payment of 1,500. In exchange, Steve
  will pay the 4,000 arrears on Marcos mortgage
  and continue paying the mortgage until Marco is
  employed. Marco is told he must stop all
  communication with his mortgage company.  

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Ex. 4 Mortgage Scam/Equity Theft (cont.)

• Steve prepares a deed for Marco to sign making
  Steve the owner of the house. Steve promises to
  transfer the house back once Marco returns to
  work and can repay the money Steve has paid to
  the mortgage company plus interest.
• Marco signs the deed and Steve immediately
  refinances the debt, paying off not only Marcos
  mortgage, but taking out an additional 25,000
  secured by the new mortgage.
• Steve disappears with the cash. The new mortgage
  is not paid and the mortgage company files a
  foreclosure action. Since Marco is no longer the
  borrower on the mortgage, he does not learn of
  the foreclosure until he received a notice of
  foreclosure in the mail.

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Prevention Solutions

• How to Avoid Solve Tangled Title Issues

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Prevention Family Owned Properties

• Homeowners should
• Write a Will to decide in advance who gets the
  house
• Probate estate of record owner as soon as she
  dies
• If some heirs of the record owner do not want to
  keep their interests in the property, they should
  sign a deed giving away their interests as soon
  as the record owner dies

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Solutions Family Owned Properties

• Probate estate of record owner and find all heirs
  to put title in name of heir(s) who actually want
  to own the property

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Prevention Lease/purchase or rent-to-own
agreements

• Make every effort NOT to enter into these
  agreements
• Make sure agreement is with the real owner of the
  property
• How to check Department of Records in your
  county
• The agreement should be in writing, include the
  property address, signed by the parties,
  especially the seller, and state how much is to
  be paid and for how long
• Notarize and record original agreement with the
  Department of Records
• Keep ALL receipts, including receipts for
• Signed receipt from seller for every payment
• Repairs
• Improvements to the property
• Real Estate tax payments

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Solutions Lease/purchase or rent-to-own
agreements

• Quiet Title Action in Common Pleas Court
• Settlement or Judicial Order
• Negotiate with the record owner to get title
  signed over

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Prevention Fraudulent Conveyance

• Homeowners
• Never sign any documents that you do not
  understand or have not read
• Keep informed read all mail.
• If the city sends a notice telling you that a
  deed has been recorded for your property,
  investigate immediately and contact legal
  assistance.
• Be concerned if you stop receiving the tax bill
  for your home.
• House should never appear vacant
• As a neighbor to collect mail, mow grass, and
  shovel snow to keep home from looking vacant
• If it seems too good to be true, it probably is.

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Prevention Fraudulent Conveyance

• Mortgage Rescue Scams
• If someone promises to
• Save home from foreclosure
• Obtain a loan modification
• Get extension on time to cure a default, or
• Arrange a short sale or deed in lieu of
  foreclosure  
• He cannot
• Charge a payment in advance
• Cant say Dont call your servicer/the bank
• When hiring a contractor
• Research who you are dealing with
• Attorney Generals Website
• Better Business Bureau

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Prevention Fraudulent Conveyance

• Buyers
• Buyers Beware
• Title Report
• Title Insurance
• Find out who is living in the house
• Are they tenants or do they have any right to be
  there?
• If it seems too good to be true, it probably is.

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Solutions Fraudulent Conveyance

• Quiet Title Action in Common Pleas Court
• Settlement or Judicial Order
• Check with District Attorney to see whether they
  are investigating the scam
• If you suspect fraud, seek legal advice
  immediately!
• Create clouds on title
• Big problem for true owner if gets a mortgage on
  property

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Resources

• To find an Attorney or Obtain Legal Advice
• Philadelphia Legal Service Agencies (Call for
  intake procedure)
• Philadelphia Legal Assistance 215-981-3800
• Community Legal Services 215-981-3700
• SeniorLAW Center 215-988-1242
• SeniorLAW Hotline statewide 1-877-727-7529
• Must be 60 and over, no income limits
• Philadelphia Bar Associations Lawyer Referral
  and Information Service 215-238-6333
• Connects callers with private attorneys in
  Philadelphia not free legal services

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Resources

• Pennsylvania Attorney Generals Office
  www.attorneygeneral.gov
• AGs Elder Abuse Hotline [phone]
• Call to report abuse or consumer fraud
• Determine if a home-repair contractor is
  registered hicsearch.attorneygeneral.gov
• City of Philadelphia
• Department of Records, Reference Division City
  Hall Room154
• Research property records, obtain copies of deeds
• Register of Wills City Hall Room180
• Raise an estate, determine if an estate has been
  opened

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Questions?

• Elizabeth Shay, Esq.
• Homeowners Assistance Program
• SeniorLAW Center
• 215-701-3207
• Roxane Crowley, Esq.
• Homeownership Attorney
• Philadelphia VIP
• 215-523-9570
• rcrowley_at_phillyvip.org