Black Families Are Losing Homes They Own: How Deed Theft Undermines Black Legacies 

During times of economic hardship, it's not uncommon for cases of financial fraud to arise or for decisions to be made out of desperation. According to the FBI, there was a 36% increase in mortgage fraud filings during the 2008 housing crisis.

Difficult times can be a beacon for those looking to take advantage of the situation. Fraud and financial misunderstanding happen more often in African American communities because of a lack of educational resources available.

Black families haven't had the same institutional support as white families available to them, creating structural racism and wealth inequality. Stories like Wells Fargo rejecting half of its Black mortgage applicants show why Black families become susceptible to another silent threat undercutting their homeownership: deed theft.

"The last time we had a wave of deed theft was around the Great Recession—it happens around shaky financial times," says Leah Goodridge, managing attorney for housing policy at Mobilization for Justice and an advocate for housing rights and racial justice."Due to historical discrimination, large financial institutions have not always been accessible to communities of color. As a result, they have set up their own informal financial institutions and practices. That plays a role in making them more venerable to deed theft because many people who seek to defraud people out of their homes are not working through financial institutions—they're working through informal arrangements."

Deed theft is undermining Black homeownership and can happen without homeowners realizing it until it's too late.

Deed Theft Hurts Black Legacies

Deed theft is when someone takes the title to someone else's home without their knowledge or approval. In many cases, a homeowner believes the documents involved in stealing their deed are actually for financial assistance.

The most common ways deed theft happens are through forgery—a homeowner's signature is faked and filed with a county clerk, and fraud—a homeowner signs over a deed without realizing what they're signing.

Deed theft schemers can hide behind limited liability and shell companies, making it hard for homeowners to understand they're being scammed and by whom.

"In most situations, the person doesn't even know that the goal is for them to sign over their deed," says Goodridge. "What tends to happen is that the person interacts with someone they feel is trustworthy. Homeowners of color are much more vulnerable to deed theft because they're in gentrifying areas. Like other elements of the criminal justice system, because the victim is a person of color, there will be little to no accountability for the person who committed the deed theft."

Black homeowners often overcome challenges to acquire their homes with the goal of building legacies. Deed theft damages those legacies.

Warning Signs

Deed theft schemes operate as affinity scams, in which the scammer is coming to the victim as a trusted member of the neighborhood or the community. The pitch is presented: "Regular banks don't serve you, so we need to work together." The person pitching says they have a system to get around the banks. It ends up being a deed theft scam in which the title to the property is taken.

"Everybody who owns a home is potentially a target for deed theft," says Joseph Rebella, supervising attorney for Mobilization for Justice. Rebella has seen many cases of deed theft in his work for the Foreclosure Prevention Project. "These scams are focused particularly on vulnerable communities that lack access to legal and financial services, namely Black and immigrant communities."

Rebella notes that no financial or legal service will involve deeding your home to somebody you just met, and people should never do that because once the deed is transferred, it is complicated to get it back.

Deed theft stories, such as that of Ray Cortez who is fighting to keep a home he's owned for a decade, highlight how easily this can happen to Black homeowners.

Get Educated

Like eminent domain, deed theft is an issue that affects homeowners of color most. Stories of deed theft will become most prominent as inflation rises, home prices plummet, and less availability of help from financial institutions. Black homeowners need to be educated and aware that deed theft is real.

If you are a victim of deed theft, there are nonprofit organizations such as Mobilization For Justice, HomeFree-USA, Habitat for Humanity, and more that can help. You can also file a complaint with the Department of Justice.