Sunday, April 19, 2009

Indiana Consumer Law: Possible Real Estate Scam

Thestarpress - State warns of new mortgage fraud scheme
FORT WAYNE, Ind. (AP) — Indiana's attorney general is warning about a mortgage fraud scheme in which criminals exploit a loophole in state law to transfer the ownership of properties.

Attorney General Greg Zoeller said the thieves aren't interested in the property they steal, but in using their "ownership" of a property to obtain a fraudulent loan. Once they get the money, they disappear with it and leave the true property owner with the debt.

"The actual homeowners, through no fault of their own, are at risk of losing their home to foreclosure," Zoeller said. "Correcting the problem and clearing the cloud off the title could cost the homeowners thousands of dollars."

Zoeller joined the Indiana Recorders Association and the Association of Indiana Counties in Indianapolis on Thursday to publicize the scheme. He explained that Indiana law does not allow county recorders to demand proof of identification from customers who are recording deeds and other notarized documents.

Other than new legislation, the article offers no suggestions for protection. Not that I can think of any that would be effective - the problem lies in the Recorder's Office.

While legislation would require all the county Recorders to see identification before recording anything, I cannot see any reason why a Recorder's office could not independently require identification.