“It’s easier to steal a house than a car.”
That’s the message Karen Yarbrough is trying to spread throughout Cook County. Since assuming the role of Cook County Recorder of Deeds in 2012, she has made it her goal to stop property fraud from happening in her county.
“This is so important — the average person’s most valuable asset. A person’s home represents everything,” Yarbrough said during a property fraud informational session in Maywood recently. “Most governmental bodies, when finding a loophole in their department, would try to keep it quiet. We want to get the word out so we can stop this.”
Property fraud involves the intentional filing of false deeds or liens with the recorder’s office, an offense known as “unlawful clouding of title.” Because county records are public and searchable online, anyone can view the records of a property. Credit agencies, banks and businesses use the county recorder to document mortgages and debts owed, which is why the system remains open for anyone.
But this also allows illegitimate claims to be filed. Yarborough’s office has identified two types of fraud.
One poses a threat to a property owner’s credit and finances; the other is used as a personal attack. Both can be expensive to combat and are serious threats to a homeowner, but are filed for different reasons.
John Mirkovic, Yarbrough’s communications director, explained how a document could be filed with malicious intent against a property. “You could pay $50 and put a lien on someone who you feel has wronged you. It could cost them thousands to take it off.”
Mirkovic said the recorder’s office often sees claims of money owed for work done on a house, or quitclaim deeds filed to transfer ownership of a property. While these filings can be done for legal reasons, often they are indicators of fraudulent activity. In malicious filings, the claimant often won’t actually expect to take ownership of the property or collect for services rendered. The claimant only wants to make things difficult for the property owner.
“If they say, ‘I’m going to pretend that I did work on this guy’s house and file a $25,000 lien on it for services rendered,’ a title company is going to look at that and they’re not going to be able to tell that it’s not legitimate,” Mirkovic said, adding that these types of records can severely damage the home-buying process. “It’ll be on the courts to get it rectified. It can delay a real estate transaction, or it can completely scuttle it.”
The other type of fraud is more predatory than vindictive.
These cases occur when a perpetrator identifies a home that is either vacant or no longer carries any financial burden — the mortgage is paid and there are no additional liens on the property. According to Mirkovic, property thieves often identify the houses in person, then go online to identify their target.
Mirkovic explained how, in the eyes of the recorder’s office, a notarized deed filed on a property is assumed legitimate and not initially questioned. A homeowner, without regularly checking the status of a deed, may not know that someone else has taken advantage of their asset — until the homeowner is responsible for someone else’s mortgage on the property.
The Cook County Recorder’s office has investigated 94 fraud claims since Yarbrough took office in January. They expect even more claims in 2014, as awareness grows about the crime.
Yarbrough campaigned on the promise of protecting Cook County from property fraud and feels her office is making progress. They’ve increased use of the county’s fraud alert system, which sends messages to property owners when new filings are made on their property. They’ve helped pass three laws that make property fraud harder to perpetrate and easier to prosecute. And they’ve been hitting the streets in an effort to make this offense more widely understood in the community.
“I walked in the door and I had heard that this stuff was going on,” Yarbrough said. “I wanted to deal with property fraud.”
The recorder’s office had a fraud alert system in place before Yarbrough took office in January 2013, but due to technical glitches and lack of promotion, it was all but unused.
“There were five properties signed up,” Yarbrough said of the alert system.
Her administration fixed the site, rebranded it and began a campaign to inform residents of this silent threat to their assets. Administration’s efforts have begun to see fruit, according to Yarbrough, noting that the system tallied 10,000 signups just in November of last year.
A 2,000 percent increase in enrollment is certainly an improvement, but the recorder’s office realizes that there is much more work to be done.
According to city-data.com, there were more than 1.1 million properties in Cook County as of the 2010 census. The recorder’s office estimate that about the same number of properties are currently not enrolled in the fraud alert system. Of the 1.1 million properties listed on city-data.com, almost 300,000 of those are unburdened with mortgages, making them more at risk of property fraud. Yarbrough admits that her office cannot actually do anything to prevent this type of offense.
“We are obligated by law to record; we do not verify,” she said.
This limitation of the county recorder’s office was a source of frustration for some state lawmakers, including Yarbrough, who submitted bills to the legislature as 7th District state representative to address the problem.
Jeanne Ives, a Republican state rep who represents the southwest suburbs, said that while she understands the dangers of property fraud, the measures being proposed were too heavy-handed.
One of the bills Ives opposed concerning dealing with property fraud was House Bill 2905. Opposed by 44 state lawmakers, this measure makes the unlawful clouding of a title — formerly a misdemeanor — a Class 4 felony. According to Ives, “a felony is too much, especially for first-time offenders.”
Ives insists she’s seen too much human error to justify placing such a permanent charge on property fraud. “People in county recorder’s offices often make mistakes,” she stressed. “Who should really be liable?”
But despite her office’s inability to prevent the damage, Yarbrough insists her legislation is trying to streamline the adjudication process once a fraudulent filing takes place. Within days, a property that is suspected of fraud can be flagged, alerting potential lenders before mortgage fraud takes place.
“We’ve created this process so that we’re better prepared and ready,” Yarbrough said.