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Deed Theft is Becoming a Growing Concern!

Writer's picture: REWIREWI



A pernicious form of real estate fraud appears to be on the rise, with consequences that can be devastating for homeowners.

Known as deed fraud or home title theft, the scheme involves forging documents to record a phony transfer of property ownership. Criminals can then sell the home, take out a mortgage on it, or even rent it out to tenants to turn a profit.


Last month, a community organizer in Detroit, MI, was charged in a particularly egregious case. Federal prosecutors say Zina Thomas, 60, stole more than 30 homes in and around the city by forging quitclaim deeds transferring the properties to fictitious entities, and then selling them to unwitting third parties.


At the time of the alleged thefts, Thomas was working for the nonprofit United Community Housing Coalition, where she was director of homeownership programs.


“Twenty-five years ago, it wasn’t easy to forge documents. Now, literally every computer has the technology to create a believable forgery, and you can buy a fake notary stamp online. So the technology has very quickly gotten ahead of the systems we have in place to prevent this,” warns Fleck.


In his private practice, and before that as a prosecutor in the Los Angeles District Attorney’s Office, Fleck has dealt with scores of cases of home title theft. In one case, he’s even seen an elderly homeowner evicted from her own house of 25 years, with her equity wiped out, after crooks forged foreclosure documents.


The FBI’s 2023 Internet Crime Report tracked 9,521 complaints of cyber-related real estate and rental fraud last year, with losses totaling more than $145 million. Once a phony title is filed, the only way to resolve the issue is through a lawsuit to establish true ownership. That typically requires hiring an attorney, ideally one who specializes in real estate law.


According to Fleck, the only true protection against title theft is through a specific type of policy, offered by any major insurer, known as a Homeowner’s Policy of Title Insurance.


Under covered risks, the policy should include language to the effect of “Someone else claims to have rights affecting Your Title because of forgery or impersonation,” according to a policy template provided by the American Land Title Association trade association.


“All title insurance companies, all the big ones, now offer it,” says Fleck. “Some of them don’t even know they do.”


While traditional title insurance policies protect against fraud prior to the purchase of a property, the Homeowner’s policy adds protection for home title theft after you own the property, says Fleck.


“This is important because if you’re a victim of title theft, a quitclaim deed fraud, or any kind of deed fraud, you just make a claim to your title insurance company, and they handle it for you — and that’s it,” he says.


While insurance also can’t prevent deed forgery in the first place, Fleck says, the right policy will eliminate expense and hassle for the homeowner by putting the onus on the insurance company to resolve the phony title claim in court.


The Recent Example in Detroit is egregious: Morgan was arrested last week on charges of wire fraud, conspiracy to commit wire fraud, money laundering and aggravated identity theft. The complaint identifies several others who were allegedly involved, but they have not been charged.


The scheme took advantage of a “safety valve” UCHC helped create for people at risk of losing their homes to tax foreclosure. During the height of the COVID-19 pandemic, the Wayne County Treasurer’s Office enacted a tax foreclosure moratorium. When it resumed foreclosures two years later, the county continued to carve out an exemption for homes that were occupied by their owners rather than homes that were owned by investors or vacant. 


That advocacy also led to some employees from UCHC having a direct line to the Treasurer’s Office, which trusted UCHC to identify homes that would qualify for the owner-occupant exemption. The treasurer could then take those properties off the tax foreclosure list. It was this privilege Morgan and her associates allegedly exploited. According to the complaint, they would claim a house was owner-occupied and flag it in the treasurer’s system to get it removed from the foreclosure list. For evidence, they allegedly uploaded documents including fake driver’s licenses and fake DTE Energy bills with account numbers linked to Morgan. 


Then they allegedly created fake deeds, appearing to transfer the homes to a fake company or person without the real owner’s knowledge. Morgan then sold some of these homes, the federal government asserts. Of course, any buyers don’t actually have any right to the homes with fake deeds because Morgan didn’t have any right to sell them.


This caught the attention of the Wayne County Register of Deeds’ Mortgage & Deed Fraud Unit last year after the alleged victims who legally owned a few of those homes told officials that somebody else was claiming ownership. The fraud unit reported Morgan’s activity to the FBI, which conducted the criminal investigation with the Detroit Police Department and the U.S. Department of Housing and Urban Development’s Office of Inspector General.


The Register of Deeds’ fraud unit has open complaints for about 31 properties that appear to be involved in the scheme, but the criminal complaint only provides details for five. It does not say how many properties had people living in them.


The complaint does, however, discuss two properties that were owner-occupied when Morgan allegedly created fake deeds for them. Using public records, Outlier Media was able to identify these properties and confirm with one of the occupants, who asked not to be identified due to privacy concerns, that she had been a victim of the scheme. 


The occupant has cancer and is undergoing chemotherapy while now fighting an eviction initiated by the “owner” listed on one of the phony deeds. According to the complaint, investigators have video evidence of the UCHC employee recording the deed, which listed Morgan’s phone number.


Two properties mentioned in the complaint are owned by investors, including the property Morgan is living in. Details about the other investor-owned property, a house on Lesure Street, demonstrate the number of fraudulent transactions, the scope of criminal activity she’s accused of and the FBI’s knowledge about both.


Morgan and her associates allegedly created fake deeds for the Lesure property. Then she allegedly sold it and several other houses to a victim who wrote a $33,000 check to ZT Realty. The check was deposited in Morgan’s ZT Realty LLC bank account. The FBI also has records of two $5,000 transfers from that account through Zelle to the Wayne County Treasurer’s Office employee. Finally, it has records of Morgan transferring $12,000 from the account to her personal bank account. Because that money was allegedly from illegal activity and totals more than $10,000, the transfers would qualify as money laundering. 


The complaint identifies more than 20 additional transfers through Cash App between Morgan and her associates last year. It also tracked more than 1,000 calls between Morgan and three associates, with many occurring after business hours. 


Thomas was charged in a criminal complaint with conspiracy to commit wire fraud, money laundering, and aggravated identity theft.



Thomas is currently free on a $10,000 unsecured bond and is next due in court on May 22.

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