Beware Title Pirates in Iowa, Illinois, and Wisconsin: Another Thieving Scam

Buying a home is already a stressful process. Dealing with contracts, financing, inspections, and the seemingly endless stream of paperwork. Well now a new danger is lurking, one that few people are aware of. And it is slowly creeping into our local real estate markets. According to a recent warning from the FBI, they're called "title pirates". These criminals can go about stealing your property by filing fake documents that claim they own it. In the worst cases, the actual homeowner may not even realize they’ve fallen victim to the scam until they try to sell their home.

How Do Title Pirates Operate?

Title pirates will typically create fraudulent deeds and other documents that falsely claim they own a property. These documents are then filed with the local county clerks or recorders, making it appear as if they have legitimate ownership of the land or home. Once these documents are recorded, the criminals will then try to sell the property, take out loans against it, or rent it out. This often happens without the actual property owner realizing their title has been stolen. That is, until it’s too late.

While these crimes are still relatively rare compared to other forms of identity theft, experts are seeing an uptick in title fraud cases, particularly across Iowa, Illinois, and Wisconsin, where certain digital schemes may go undetected for longer.

Recent Title Pirate Incidents in the Tri-State Area

In Iowa, this scam was reported by the Southeast Iowa Union, where title fraudsters have been using fake quit claim deeds to transfer property ownership to themselves. In one incident, a fraudulent document was filed in Polk County, causing confusion when a home was listed for sale, even though the actual homeowner had not sold it. Additionally, residents in Winneshiek County received deceptive postcards warning about "lapsed home warranties," which turned out to be part of a larger scam to steal property titles through fraudulent claims.

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Moving to Illinois, a particularly chilling case was discovered in Cook County, where criminals impersonated homeowners and transferred titles to themselves. One case reported by CBS News Chicago, involved Chicago’s City Treasurer, Stephanie Neely, who found her property deed had been fraudulently transferred to a religious group. This highlights how vulnerable property titles are to manipulation and the ease with which scammers can take advantage of easily accessible public records.

In Wisconsin, Waukesha County gmtoday reported a significant fraud case involving a real estate company. The company was tricked by an email that appeared to come from the title company, containing fraudulent wire instructions. The company lost over $80,000 in the scam. This is just one example of how even businesses can fall prey to title fraud.

How to Protect Yourself

So, how can you protect yourself from title pirates? Here are some tips for homeowners and buyers:

• Sign Up for Property Alerts: Many counties across the Tri-States offer free alerts to notify homeowners when a new document is filed under their name. This is an excellent way to catch fraudulent activity early.
• Title Insurance: When buying a property, always make sure to secure title insurance. Lender’s title insurance protects the lender’s interests, but you should also consider purchasing owner’s title insurance, which provides additional protection for you in case a title issue does arise.
• Do a Title Search: Make sure the property is free from any claims or fraud before finalizing a deal. If you’re not sure how to do this, work with a reputable real estate agent or title company.
• Know Who You're Dealing With: If possible, buy property from people who live in the home or are long-time community members. Avoid dealing with absentee owners or people from distant locations who may not be easily reached.

As always, if you suspect nefarious activity from the home buyer or seller, reports can be made to the FBI. Title piracy may still be a fairly recent concern, but with the right precautions in place, you can protect yourself from the latest form of theft. Remember, preventing these scams from happening to you starts with being informed and proactive.