Protecting Real Estate Transactions From Fraud With A Notary And Other Services

Real estate fraud has caused nightmares for homeowners and heartache for potential buyers in the past several years. One uncovered scheme included ring members who scouted for abandoned homes, the owners were either dead or living elsewhere, looked up the property records, and began the forgery process that eventually was able to sell hundreds of homes for a few thousand dollars to unsuspecting families.

These kinds of crimes are generally exposed several years after the action has taken place when the legal property owner decides to sell their property. Legitimate title insurance companies initiate a title search that can discover that the property has been transmitted to another individual without the knowledge of the rightful owners or public officials at the recorder's office. 

Dissuading Real Estate Fraud: A Notary

Since the law considers certain documents to be of such importance, it has stipulated that these documents must be signed by the initiator in the presence of a notary. The notary's purpose in this action is to authenticate signatures and administer oaths on these documents in order to prevent fraud from occurring. In Cape Coral and Fort Myers, Florida, it is the responsibility of the notary to make sure that signers have proper identification and are within the notary's presence before affixing their seal to any document.

Other notary responsibilities include being alert for individuals who are being forced to sign documents against their will, as well as making sure that documents are complete before notarizing them. An example of this would be a blank space where the legal description of a property is supposed to be on a deed.

Escrow As A Protective Measure

Escrow is another line of defense against fraudulent real estate transactions. Escrow is a device designed for the deposit of funds, documents, or other items for the purpose of delivery to another party upon the completion of a set of instructions. Having an escrow agent allows all parties the assurance of having their interests protected while the real estate transaction is being completed. If the seller is not legitimate, the title search will uncover the truth and save rightful owners and potential buyers from potentially heartbreaking situations.

Title Insurance For The Unknown

An additional link in the fraud protection chain is title insurance for buyers and lenders. Before a title insurance company insures property, it initiates a title search to establish a chain-of-title, make sure there are no breaks in the chain of ownership, and to note any other documents, such as easements or liens, that have been recorded against the property. After establishment of a clear title, the title insurance company will issue a title insurance policy that will protect the buyer and the lender from any challenges made toward the ownership of the property. Title insurance covers legal fees associated with court actions as well as reimbursement of funds to lenders and buyers that have been lost due to a challenge to the property.