Residents Affected by Houston’s Housing Scam
Residents of Houston were hit by a bold housing scam between 2002 and 2008, and some victims are still feeling the effects today. Fake and forged documents were used to fraudulently sell nearly 70 vacant homes in Houston’s Harris County.
Houston’s Highway Robbery
For six years, daring con artists in Houston forged deeds, signatures of deceased homeowners, notaries seals, and other false claims to vacant properties. The documents were forged so well that they were validated by the Harris County Civil Courthouse, resulting in official filings with the county courthouse records.
These rogue real estate investors resold properties to unsuspecting buyers and made millions. After receiving official filings and validation, these criminals would change the locks on the stolen homes and post “For Sale” signs outside, luring in unsuspecting buyers.
However, unlike most real estate scams that plague local communities, the largest deed scam in Harris County history has yet to reach a clear conclusion.
Though the Texas Attorney General’s Office has targeted 11 alleged conmen in this crime, only one man has been criminally convicted for his role. Roughly $6 million in court-ordered penalties have gone unpaid, despite three-year civil litigation by the Texas Attorney General’s Office.
Real Residents Impacted by Fraud
Hearing about real estate scams doesn’t always feel like a true threat until it happens to you. For residents like Wendy Johnson and Santiago and Eleuteria Flores, housing scams and the threat they possess is more real than ever before.
Wendy Johnson had stopped to check on her deceased parents' vacant two-bedroom house when she spotted a "For Sale" sign on the lawn.
Johnson, the sole heir of her parents' former home, hadn't authorized any sale and was understandably alarmed. The next time she visited, the locks had been changed. When she knocked on the front door, a stranger answered and claimed the house was his. He'd paid for it and had the legal papers to prove it.
On the other end of this scam, Santiago and Eleuteria Flores were conned into buying fraudulently sold property. The Houston couple paid $10,000 cash in December 2003 for what looked like an authentic deed. They invested another $30,000 in supplies and sweat equity to improve a long-vacant house only to learn that it had never been theirs, court records show.
"We worked so hard," Eleuteria Flores said in an interview with The Houston Chronicle. "We spent every night after my husband got off work at that house for seven months. After we lost it, I got very sick. From depression."
For residents like Johnson and the Flores family, justice has yet to be served. Some victims have recouped their rightful home while others are left with nothing.
If you have any information about these crimes or have been the victim of a ‘dirty deed’ scam (which you can tell by performing a quick search with the county clerk website to see if your information is correct), contact the Harris County District Attorney's Office.
Most Common Real Estate Scams
As a real estate professional, you are responsible for protecting your clients’ interests and should be aware of common real estate scams and schemes. Here are the five most common real estate scams to keep an eye out for:
1. Escrow wire fraud: Scammers claiming to work with your client’s title or escrow company will reach out to them with instructions on where to wire their escrow funds. Fraudsters will go to great lengths to enact this ruse, even setting up fake websites that appear similar to the title or lending company your client is working with, making their request seem like the real deal.
2. Loan flipping: Loan flipping occurs when a predatory lender persuades a homeowner to refinance their mortgage repeatedly, often borrowing more money each time.
3. Foreclosure relief: Homeowners who fall on hard times and get behind on their mortgage payments can become desperate to save their homes. Scammers will swoop in with offers of foreclosure relief to capitalize on homeowners’ vulnerability. In reality, they’re just collecting a large upfront fee with no real intentions of helping the homeowner.
4. Rental scams: Scammers post fake property rental ads on Craigslist or social media using photos from other listings to lure in unsuspecting renters. Fraudsters, who have no connection to the property or its owner, will ask for an upfront payment to let your clients see the property (or hold the money as a “deposit”).
5. Moving scams: Your client has found a new place to call home, and now they have to find a way to move all of their belongings. They might fill out a form for a moving company estimate, outlining all their items, and receive an estimate for $4,000 to ship them from their current home to their new one. Once this is done, the “company” will raise the estimate and corner your client into paying more to give their belongings back.