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Good Idea No Cigars |
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Dear Edith: One growing area of fraud that impacts home owners is fraudulent title conveyance and fraudulent mortgages.The criminal either arranges for a transfer of title with a fake signature or assumes the identity of the homeowner to take out a mortgage.I have a possible solution that I would like to run by you to get your opinion:
Since both types of fraud work best when the house is mortgage free, I'm considering creating a sham mortgage that would encumber my house, effectively preventing someone from stealing it by fraudulent transfer or mortgage.It would work like this:
I create a mortgage with myself as both lender and borrower.(Alternatively, I might have to create an LLC or other entity to hold the mortgage).The amount of the "mortgage," which would be officially recorded, would be more than the value of the house and would prevent any attempt to steal the property.No one could take out a mortgage on a property that is already mortgaged to the hilt and anyone creating a false transfer of title would become liable for the amount of the "mortgage."
What do you think?Please note that I'm not asking for legal advice here--just an opinion on the general concept.I would use a lawyer for actually proceeding with this idea. |
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What an intriguing idea! For starters, with email I don’t know what state you’re in, but you might have a mortgage tax to pay before the document could be recorded.In the end, though, I wonder if the problem is widespread enough to warrant all that complication.My guess is that your chances of being hit with that kind of fraud are very small indeed. |
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Edith
Originally published on January 6, 2006 |
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