In late March, the FBI warned of the newest form of identity theft: house stealing. The crime often works like this: A group or an individual finds a vacant home. They look up the deed information. They briefly steal the current owner’s identity (or create a fake one if the home has been foreclosed on) and create IDs, driver’s licenses, etc. They quickly sell the house for sometimes rock-bottom prices, because either way they profit tens if not hundreds of thousands of dollars.
And there’s a variation on that theme where someone with a fake identity promises to help those in mortgage trouble with refinancing, but they end up stealing the title and the money.
Sounds complicated. But it’s no more complicated than the millions of dollars in mortgage fraud cases that Minnesota was targeted with in 2007, landing the state in the top 10 for mortgage fraud cases that year. FBI Special Agent Paul McCabe says that no cases of home stealing have been reported to the Minneapolis Division yet. But with foreclosures and abandoned homes on the rise, he warns to be on the lookout.
“We haven’t seen anything yet,” he says. “And I say ‘yet.’ I know it’s been happening in other parts of the country. But we don’t have any active cases here at the current time. We’ve had plenty of mortgage fraud cases. But not this yet.”
With new predatory lending laws in place in Minnesota, it makes it harder for mortgage brokers to defraud consumers. But it doesn’t stop home stealing or help the tens of thousands of those with subprime or Alt-A loans — and those with prime loans who are in negative equity as a result of the subprime fallout — who are forced to abandon a home they can’t sell.
Foreclosures in Minnesota have risen 68 percent this year, according to the lastest RealtyTrac study. The number of abandoned homes in Minneapolis has risen to nearly 1,000. And it’s not just homes saddled with subprime loans that are left vacant. According to the May numbers from the Minneapolis Area Association of Realtors, it will take an average of 9.8 months to sell a single-family home. That means more owners will have to leave their old homes behind.
McCabe says that the best way to avoid the home-stealing problem is simply by reporting any suspicious activity. “A lot of times it’s just the information intake,” he says. “If there is a case and someone is reporting it, it can lead you to a group or criminal enterprise.”