A package of bills has been introduced in the Michigan House and Senate to help homeowners who become victims of deed fraud.
Deed fraud is when someone files a forged deed to claim ownership of someone else's property with a county Register of Deeds. They can then take out loans on the property or even try to sell it to a second victim.
Donovan McCarty is an associate professor of law and director of the Housing Justice Clinic at Michigan State University.
McCarty said in Michigan, it's easy to commit the fraud and hard to fix it. Registers of deeds don't have any authority to substantially review deeds that are submitted to them, he said.
"The problem is, once a false deed is recorded, the least amount of time I see it take to fix is about six months, and it can cost a lot of money to hire an attorney to do that — the average is $3,000-$5,000, and in more complicated cases, it can be $10,000 or more."
McCarty said in some cases, people have lost their homes to foreclosure, because the false deed triggered a lifting of the cap on their property taxes, and they couldn't afford to pay the higher tax while they were fighting to get the false deed expunged.
In another case, which he represented, the person who submitted a false deed then filed an eviction notice for the man who owned the house.
Because the man had communication issues — including no phone and computer at home — he missed court hearings, and the eviction went through.
"The bailiffs came and broke down both his doors and removed all his property," McCarty said.
The man lost all his personal belongings, and had to live in hotels while McCarty handled the court case to get him back in his home.
"The fraudsters typically prey on low income people, minority communities," McCarty said. "Detroit seems to be a place that is specifically hard-hit by deed fraud. And so as you can imagine, the people in those situations especially don't have the resources to fight these frauds."
The bills set up a fast-track process to get the false deed expunged, with a fill-in complaint form that property owners can file with the court themselves, without having to hire an attorney.
The bills also keep the victim's property taxes from being uncapped and skyrocketing while the process is taking place, and extends the statute of limitations from one year to three years to go after the perpetrator of the fraud, although McCarty says it's rare that they are identified and held responsible.
