New bills target deed fraud, a big problem in Detroit
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State Sen. Sylvia Santana (D-Detroit) and other legislators are pushing new state rules that would help victims of deed fraud get their homes back.
Why it matters: Deed fraud — a national problem that's considered a full-on crisis in Detroit — can lead to homeowners losing their houses and generational wealth.
- Back taxes, cash deals for homes and complicated ownership histories in Detroit can make residents more vulnerable to these scams, according to Donovan McCarty, director of MSU's Housing Justice Clinic, in an article for The Conversation.
State of play: The bills would make it faster and less expensive for Michigan homeowners to challenge fake deeds. They would also:
- Extend the deadline for deed fraud victims to file lawsuits.
- Allow victims to recover more losses and attorney fees when they sue fraudsters.
- Stop homeowners from being hit with property tax increases due to fraudulent ownership transfers.
How it works: Deed fraud is when a scammer transfers property they don't have a legal right to. That could mean forging someone else's signature on a deed. The scammer can then claim ownership and sell or rent it.
- The scammer could also offer to help a homeowner with financial troubles and get them to sign documents that unwittingly transfer their home away.
- These problems can lead to expensive legal fees as homeowners fight for homes they already own.
Zoom in: Detroit City Council hosted town halls early this year to teach people how to recognize these increasingly common scams, according to WDIV.
What they're saying: "We've seen where people have actually had their properties … stolen from right under their noses," Santana tells Axios.
- "[These] are just four of many bills that need to happen … but it is a step in the right direction. I hope we will put more teeth around property protections."
By the numbers: Wayne County's mortgage and deed fraud unit has recorded 15,889 inquiries and opened 2,913 cases since starting in 2005.
Catch up quick: High-profile criminal cases have shone a spotlight on the scams.
- In July, a local nonprofit homeownership director and a former Wayne County Treasurer's Office employee were sentenced to 90 and 66 months in prison over a scheme to steal around 100 properties from people at risk of tax foreclosure.
Go deeper: Find tips to avoid fraud and submit complaints on Wayne County's website.