For 40 years, estates attorney Kenneth Phillips says he’s been digging through documents, home deeds, titles and everything in between dealing with estate.
KPRC 2’s Rilwan Balogun visited Phillips to get answers to Click2Houston Help Desk question regarding deed transfers and allegations of fraud.
The viewer asked this question, “You reported that someone can forge your name on title documents and then use the fake documents to take out mortgages and get loans. Where is the due diligence on the part of the loan provider to do a title search to be sure that this person has clear title and has been making tax payments on the property? Shouldn’t that reveal a discrepancy in the names? You suggest that the true homeowners have no recourse to restore their property, but if the county tax assessor can show no sales documents and no transfer of ownership that is legitimate, shouldn’t there be a way to demonstrate that this was a false conveyance?”
Rilwan: Where’s the due diligence on the part of the loan provider to do a title search to be sure that this person has clear title and has been making tax payments on the property? Shouldn’t that reveal a discrepancy in the names?
Kenneth: Well, the answer to that is yes. I will tell you that if you go to a conventional lender or a commercial bank and by conventional lender, I mean a third-party mortgage company, including loans that might be guaranteed by the VA or FHA, they require title insurance.
However, Phillips says so much is done virtually nowadays, which he believes leave people vulnerable.
“They want to make it easy, ‘Oh can I DocuSign everything,” Phillips said. “‘Can I do this? Can I do that?’ That’s how the fraud, the level of fraud, can be raised because there’s no longer personal contact.”
Rilwan: You suggested that the true homeowners have no recourse to restore their property, but if the county tax assessor can’t show no sales documents and no transfer of ownership, that is legitimate, shouldn’t there be a way to demonstrate that this was a false conveyance?
Phillips: Yeah, it’s called filing a lawsuit.
Rilwan: Yeah. And that’s the only way to show that there’s an issue?
Phillips: Neither the clerk nor the appraisal district will render a judgment about who actually owns the property. That’s not their function. And by law, they’re prohibited from doing that.
The Harris County Clerk’s Office confirms, by law, their hands are tied.
“The Clerk’s Office is a recording agency that, by statute, is mandated to accept property document filings without discrimination to the public. Per H.B. 1681, individuals filing property documents in Harris County have been asked to present an acceptable form of identification since June 19, 2015,” according to a statement sent to KPRC 2 in October. “In instances where we suspect a document is fraudulent, whether submitted electronically or in person, the case is provided to the District Attorney’s Office for review. We are currently exploring ways to mitigate these challenges. However, there is currently no application available that can be implemented to catch up with this type of activity before it happens. The laws that guide property transactions in Texas need to be strengthened by the legislature to allow the implementation of measures to eliminate this type of fraud.”
Phillips said unfortunately, for people to get issues like these resolves sometimes requires filing a lawsuit.
