The Kansas City Star published an article on property theft . A quote from the article provides details as to how this scheme works:
The typical scenario involves a thief forging the property owner's name on a quitclaim deed or a warranty deed. The forgery suggests that the owner sold the house or deeded the property to the thief. The forged deed is notarized either legitimately or fraudulently, then filed with the Jackson County Department of Records. Once the document is processed, the thief becomes the owner of record.The thief then uses the property as collateral for a bank loan. In some cases, lax or corrupt mortgage brokers and appraisers help pave the way with inflated appraisals and phony loan application documents. Another option is to sell the house as a fixer-upper to another buyer. In either scenario, the thief cashes out and seemingly disappears. . . .
Authorities have discovered that in many cases the legitimate owners are elderly or in nursing homes. The thieves sometimes scour obituaries for deceased property owners to victimize, investigators said.
The thieves often use aliases and file a string of deeds on a single property to muddle the paper trail.
They often focus on distressed neighborhoods, cruising the streets for vacant homes. In many cases, the houses are vacant or appear abandoned by off-site owners. In such scenarios, it is less likely that the owner will discover the theft or have the financial resources to seek legal help, investigators said.
The article also references several other criminal and civil suits alleging this type of conduct, including:
Two forgery counts filed by Jackson County prosecutors against William A. Carter alleging that Carter forged the names of a deceased couple and then sold their property as a fixer-upper to Leroy Brown Jr.
A civil action in Jackson County court against Gordon J. Thomas by two Kansas City men. The case is reported to include allegegations that the mens' signatures were forged on a warranty deed.
A civil action against Miles Thomas, listed in the lawsuit at the same address as Gordon J. Thomas, by a 78-year-old Kansas City man in connection with an allegedly fraudulent warranty deed.
A civil lawsuit by an elderly woman against Brent Barber and three other defendants that was filed in November 2000 alleging a fraudulent quitclaim deed. The article states that Barber is also named in four other quiet title lawsuits in Jackson County Circuit Court. Barber was indicted by a federal grand jury in Kansas City in August and has entered a plea of not guilty.
Rachel Dollar, the editor of Mortgage Fraud Blog is an attorney and Certified Mortgage Banker who handles litigation for lending institutions and secondary market investors.