Posted by SueW/Tn on 4/15/09 3:45pm
Msg #285181

just saw this article...

Tougher notary laws sought to curb house thefts
Published: 4/15/09, 4:26 PM EDT
By KATHY MATHESON
PHILADELPHIA (AP) - The small row house had been unoccupied for months, but it was still a home. And if she had really wanted to sell it, Virginia Coontz says, she certainly would have spelled her name right on the title transfer.

Even with her name wrongly spelled "Coonzt," the sale went through and she ultimately lost the house. Prosecutors said she was a victim of a title fraud ring that collected about $400,000 by selling off more than 80 properties - unbeknownst to the true owners - through the help of corrupt notaries.

Experts on real estate fraud say the yearslong scheme shows why a patchwork of state laws governing the work of notaries, who certify title transfers and other official documents, should be strengthened.

With a notary seal, criminals can steal the title to a house, take out a mortgage, drain the equity in the property and even give themselves power of attorney to access a victim's bank accounts.

"Notaries really are the gatekeepers for fraud in real estate transactions, yet we don't put in the type of mechanism that would help law enforcement track down the crooks," said Dave Fleck, a former Los Angeles County prosecutor specializing in real estate cases.

States have widely varying rules for becoming a notary public, many not requiring a background check. About 20 states don't mandate that notaries keep journals of their transactions, and even fewer require a thumbprint from home sellers when notarizing property transfers - a regulation recently enacted to help combat title fraud in the Chicago area.

Philadelphia District Attorney Lynne Abraham said stricter regulations in Pennsylvania may have prevented Coontz's nightmare and the heartache of dozens of other victims, including owners who lost title to their homes and unwitting buyers who spent thousands of dollars on properties they never really owned.

In the scheme, ring members scouted for abandoned homes - the owners were dead or living elsewhere - looked up the property records and began the forgery process with the help of four notaries, prosecutors said. They then sold the homes, usually for a few thousand dollars, to unsuspecting families, many of them immigrants with little understanding of real estate procedures.

Abraham said a thumbprint requirement might have deterred criminals posing as home sellers because they likely would not have wanted to leave behind evidence of their identities.

The district attorney tried to add that mandate to legislation in Pennsylvania in 2000, along with a requirement to photocopy the ID cards of those seeking notary services. Her effort failed, partly because the Pennsylvania Association of Notaries said the proposals would be too onerous. Association president Marc Aronson said he believes such provisions would get more backing today.

Under current law, Pennsylvania notaries need personal knowledge, "satisfactory evidence" - a government-issued ID card - or a creditable witness to verify someone's identity, he said.

A thumbprint requirement has been the law in California since 1996, providing an invaluable tool for tracking down forgers and also helping protect notaries from being victimized, Fleck said.

"Notaries do so many transactions, they ... rarely if ever are able to pick people out of lineups," Fleck said. "The notary memory is really not a tool for law enforcement, so we need to rely on something else."

The National Notary Association, based in greater Los Angeles, is pushing for all states to require notaries to keep transaction journals, said executive director Tim Reiniger. Only 29 states and U.S. territories, including Pennsylvania, currently do, though legislation is pending in several other states.

The association is also calling for stronger vetting and better education of notaries.

Twelve states do background checks before commissioning notaries, Reiniger said, and of those, only California requires fingerprints. Pennsylvania requires would-be notaries to take a three-hour class and obtain an endorsement from their state senator.

Without strengthening Pennsylvania's notary laws, Abraham said title fraud will continue as a "cottage industry" in Philadelphia, where a shrinking population has left behind many rundown, unoccupied row houses; she estimates about 500 homes have been stolen over the past few years. It's a problem that has been prevalent in a number of cities, including Chicago and Detroit.

Fifteen people, including the four notaries, were charged in February in the Philadelphia scam that cost Coontz her home and ran from 2004 to 2007. Last week in San Diego, a notary was among 24 people charged in a $100 million mortgage scam involving 220 properties.

In 2004, Coontz and her teenage daughter left their home temporarily unoccupied when they moved in with her son. Then, in October 2005, relatives saw people coming and going from the property; Coontz arrived to find her valuables gone and bags full of her other belongings on the sidewalk. A confrontation and several phone calls led to a police report and discovery of the forged deed.

Behind on her taxes and unable to afford a lawyer, Coontz gave up. The house was sold at a sheriff's auction in 2007 for $15,600.

Coontz, 49, now says she is unable to work due to depression. She and her teenage daughter continue to live with her son. She sleeps in the basement, and her daughter, on a living room couch.

"It hurts to have to see that," she said. "What 17-year-old doesn't want their own room?"

Reply by jba/fl on 4/15/09 4:44pm
Msg #285189

"It hurts to have to see that," she said. "What 17-year-old doesn't want their own room?"

What 49 year old doesn't want their own room?

This whole article makes me angry and sickens me. All for want of money or lack of money.

Reply by Sharon Taylor on 4/15/09 5:25pm
Msg #285197

Why would she need to hire a lawyer?

I'm confused. Clearly the entire transaction was fraudulent, so why wouldn't it be undone and she be put whole by the system as a matter of course? The Deed conveying title should be declared invalid by the County, and title would revert back to her, right? At which point she would need to pay the back taxes and any other expenses she would have had anyway as the owner, right?
If it were me, I'd be trying to get as many of the other 219 homeowners involved as possible and everyone kicking in to a fund to hire a lawyer, if necessary, and also making daily calls and writing letters to every lender, title company, law enforcement agency, government agency, newspaper, etc.
It is sickening to read of these types of criminal acts, but notaries were not the only ones involved. Clearly there were title companies and loan officers and other crooks who got the scam rolling and then found willing notaries or became notaries so they could do the dirty deed themselves.

Reply by Pat/IL on 4/15/09 6:27pm
Msg #285212

Re: Why would she need to hire a lawyer?

Is that how it works in PA? Sheriff's sale for nonpayment of taxes? I have heard of losing property to a tax buyer, or property forfieted to the county for nonpayment of taxes. But when I hear Sheriff's Sale, I think mortgage foreclosure.

Anyway, this story doesn't really make sense. This poor lady wound up losing the property, purportedly, through nonpayment of taxes, and not through the fraud.

And Furthermore:
"Clearly there were title companies and loan officers and other crooks who got the scam rolling and then found willing notaries or became notaries so they could do the dirty deed themselves. "

I suppose the fraudsters would have to know something about real estate conveyance in order to pull something like this off. But, what makes it clear to you that any title companies or loan officers were involved at all? It seems to me these were all cash deals for low amounts, precisely in order to avoid the need for a mortgage and the scrutiny of a title company.

It seems to me the real victims here are the poor immigrants who thought they bought a home - only to find out that they didn't. Their hard-earned thousands are gone forever. The fraudulent sale should be reversed. One cannot sell what one does not own.

Reply by MikeC/NY on 4/15/09 6:49pm
Msg #285216

Re: Why would she need to hire a lawyer?

"I suppose the fraudsters would have to know something about real estate conveyance in order to pull something like this off."

Not necessarily. There was a big deal here in NYC last summer when a reporter for one of the local rags managed to "steal" the Empire State Building by filing a false conveyance with the county clerk. The deed was properly notarized, so the clerk accepted it for recording - which is exactly what they're supposed to do. The powers that be in NYC were not amused; I don't think that reporter will be pulling another stunt like that any time soon...

The point is that it's very easy to do this stuff, because there's not really a system in place to prevent it. Whether the fraudulent transaction will stand up in court is another story altogether.

Reply by BrendaTx on 4/16/09 11:05am
Msg #285286

Re: Why would she need to hire a lawyer?

>>>Anyway, this story doesn't really make sense. This poor lady wound up losing the property, purportedly, through nonpayment of taxes, and not through the fraud. <<<

Right, Pat. One way or the other she missed paying her taxes.

Reply by sue_pa on 4/15/09 7:24pm
Msg #285221

...Abraham said a thumbprint requirement might have deterred criminals posing as home sellers because they likely would not have wanted to leave behind evidence of their identities...

flawed thought process in this statement. If the notaries were willing participants, and the ones signing/forging the deeds were willing participants, why in the world does someone (Ms. DA) think that a smudged thumbprint somewhere would deter them?

Pat/IL - nonpayment of real estate taxes results in your property being sold by the county at tax sale ... we don't have the buyers/bonds/redemption periods/whatever I've read about in other states.

Reply by CaliNotary on 4/15/09 7:49pm
Msg #285224

Thanks for posting this

I just forwarded it to Notary ASAP, who got annoyed with me a couple of weeks ago because I wouldn't send a loose acknowledgment to a title company because they had printed grant deeds that had the notary wording split over 2 pages. The notarization was valid so I made them send the deeds to me to void the original notarization before I attached another acknowledgment.

These companies think we're just being difficult when we do stuff like this, they don't seem to care that we're doing it to protect ourselves and the borrowers. They'd rather we expose ourselves to god knows what kind of liabilities and the borrowers to god knows what kind of fraud, than be slightly inconvenienced on their end. It really kind of sickens me.

And of course I haven't been called by Notary ASAP since, 2 or 3 years of doing excellent work for them apparently means absolutely nothing if you dare to say 'NO". And I'm guessing me sending them the article isn't going to help matters, lol.

Reply by JanetK_CA on 4/15/09 8:29pm
Msg #285231

Great info...

Could you please provide us link or a source where this was published so we can give appropriate credit if passing this on to someone else. (E.g. the situation Cali was talking about.) Many thanks!

Reply by SueW/Tn on 4/16/09 3:51am
Msg #285264

It's an article I picked up from AP:

KATHY MATHESON Associated Press Writer
3:08 PM EDT, April 15, 2009

It's all over the internet, I googled "Philly notary crime" to backtrack though. I remember several years ago this same thing happening down in Florida where seniors were leaving their homes during the summer and coming back in the winter. A group of criminals started doing the same thing but they were obviously dumber because it didn't last long.

Reply by JanetK_CA on 4/16/09 3:03pm
Msg #285383

Thanks! Unbelievable low-lifes! grrrrr!! So sad... n/m

Reply by bhb/VA on 4/16/09 11:57am
Msg #285310

This article reads like an article from the XYZ newsletter or the emails they send out. Hmmmm....

Reply by Mary Ellen Harvley on 5/3/09 11:58pm
Msg #287185

I am sorry, but it's a sad sad world we live in if this ladies home and all the others, were not returned to them.

Something is seriously wrong with this picture!!!!