Elizabeth Shay, EsquireHomeowners Assistance Program Coordinator

SeniorLAW CenterRoxane Crowley, Esquire

Homeownership Attorney, Philadelphia VIPSusan Wysor Nguema, MSW

Homeownership Advocate, Philadelphia VIP(Co-Author, Susan will not be presenting today)

Tangled Title and Deed FraudHow to Protect Yourself and Your

Family

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 person’s 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 PropertiesProblems 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 1:There 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 1:There 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 Harvey’s property passes after death. Harvey’s 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 don’t 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 Olivia’s 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 1Olivia 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 2After Renee makes her last payment, Olivia tells her the

property taxes have not been paid and the city wants to sell the property.

Scenario 3Renee has been making payments, but after nine years

the payments start coming back in the mail. Renee drives out to Olivia’s 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 owner’s name is removed from the deed.The true owner must then prove, legally, that she

owns the propertyThe fraudulent owner can re-sell or mortgage the

propertyHow 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: That’s 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 didn’t 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 Sam’s 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 Harry’s 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. Harry’s 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 can’t 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 Marco’s 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 Marco’s 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 diesIf 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 agreementsMake 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 forSigned receipt from seller for every paymentRepairsImprovements to the property Real Estate tax payments

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Solutions: Lease/purchase or rent-to-own

agreementsQuiet 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 readKeep 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 vacantAs a neighbor to collect mail, mow grass, and shovel

snow to keep home from looking vacantIf it seems too good to be true, it probably is.

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Prevention: Fraudulent Conveyance

Mortgage Rescue ScamsIf someone promises to:

Save home from foreclosureObtain a loan modificationGet extension on time to cure a default, orArrange a short sale or deed in lieu of foreclosure  

He cannot Charge a payment in advanceCan’t say “Don’t call your servicer/the bank”

When hiring a contractor:Research who you are dealing with

Attorney General’s WebsiteBetter Business Bureau

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Prevention: Fraudulent ConveyanceBuyers:Buyers Beware

Title ReportTitle Insurance

Find out who is living in the houseAre 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 CourtSettlement 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 titleBig problem for true owner if gets a mortgage on

property

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ResourcesTo find an Attorney or Obtain Legal Advice:

Philadelphia Legal Service Agencies (Call for intake procedure)Philadelphia Legal Assistance: 215-981-3800Community Legal Services: 215-981-3700SeniorLAW Center: 215-988-1242

SeniorLAW Hotline – statewide: 1-877-727-7529Must be 60 and over, no income limits

Philadelphia Bar Association’s Lawyer Referral and Information Service: 215-238-6333Connects callers with private attorneys in Philadelphia; not

free legal services

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ResourcesPennsylvania Attorney General’s Office

www.attorneygeneral.gov

AG’s Elder Abuse Hotline: 1-866-623-2137Call to report abuse or consumer fraud

Determine if a home-repair contractor is registered: hicsearch.attorneygeneral.gov

City of PhiladelphiaDepartment of Records, Reference Division: City Hall Room154

Research property records, obtain copies of deedsRegister 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@phillyvip.org

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