Dirty Deeds: NBC Shows How Loophole Could Cost You Your Home

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NBC 5's Lisa Parker gets at the heart of the problem with property and recording fraud: criminals and bad actors abusing the open recording system and a collective sense of honesty on which we all rely.

Because homeowner's can't "freeze" their property titles and because County Recorders aren't allowed by law to verify legal claims made in recorded documents, everyone who owns property is vulnerable to having their title "clouded" by fraudulent documents.

Even savvy financial professionals like Chicago City Treasurer Stephanie Neely, a victim of property fraud, are speaking out to let people know this can happen to anyone:

Yes, I tell people it can happen to me, and I am a financial professional! People never check their deed. Now I tell people, check your deed, check your deed, check your deed!

Recorder Yarbrough wants home and property owners to know about this vulnerability, and about the steps her office has been taking to fight back:

"When I walked into this office, I knew this was happening ... and I decided I couldn't just sit idly by," said Yarbrough.

Yarbrough passed three bills in Springfield to help fight and punish this fraud. The new laws make certain fraudulent recordings a felony, and another created a new judicial review process to quickly invalidate clearly fraudulent documents at little to no cost to the victim.

Lisa Parker also interviewed Dr. Mark Pitcavage, the nation's leading authority on sovereign citizens (perpetrators of a good portion of property fraud), who was invited to Chicago by Yarbrough to share his knowledge with CCRD staff and local, state and federal law enforcement officials. Pitcavage describes some of this fraud as "paper terrorism," or the "use of bogus legal documents or the misuse of legal documents for the purpose of harassing, intimidating, and retaliating against anyone who has irritated a sovereign."

For example, I'm a sovereign citizen and I feel you have trespassed upon me in some way. I file a $25 million lien against your home and you can't sell that home. Your title is clouded and you have to go to court, spend a lot of time, money and effort. That's the essence of paper terrorism, using our open government as a weapon against the government and its citizens.

Though the fraudulent transfer can ultimately be rectified in court, there are scenarios where it is already too late. If the true owner of a property passes away before the fraud is discovered, or it is discovered in regards to a pending property sale, the resulting delay can be enough to delay or derail the transaction.

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