New Home Purchase Scams

     I just purchased my first new home in sixteen years and my family was very excited.  We still have our old house to sell, which gives us the luxury of the slow move, but with the burden of carrying two houses.  Since we moved in we have been inundated with unsolicited mail, many of which are either scams or overpriced rip-offs.

     The most direct scam was a very official looking letter that offered to provide me with a copy of my deed and property appraiser’s report for the small price of only $86.00, with free shipping.  This type of letter preys on people’s fear, by implying in legalese that these are “must have” documents.  This company simply downloads the information, for free from the county, and then passes it off as if it was some valuable, expensive and hard service to justify the price.

     If you do not have a copy or the original of your deed, you can download a copy from oris.co.palm-beach.fl.us/or_web1/or_sch_1.asp.  In the search box, type your name (last first with no comma) and you can restrict the results to deeds, by placing a “D” in Restrict Search by Document Type Code box.  From the list, select the deed you want, then select “get image” to see a copy.  From that screen you can print or save a copy as a pdf (with a big This is Not a Certified Copy watermark).  If you want a certified copy of your deed, you can request a copy by mail to Clerk & Comptroller, Palm Beach County, P.O. Box 4526, West Palm Beach, FL 33402.

     When ordering a deed, you will need to include the Official Records Book and Page and the number of pages of the deed, along with payment.  The charge is usually $1.00 per page plus an extra $2.00 to certify the copy.  So a two page deed will only costs $4.00 plus postage, far cheaper than the scam artists. 

     If you want the information available from the property appraiser, simply navigate to www.pbcgov.org/papa.  Input your name (if you closed recently it will take a while to be updated, I closed September 7 and as of October 20 my property is still shown as owned by my seller), or your street address.  The property appraiser will provide detailed information about size, exemptions, structures and sales of the property searched, and you can easily print a property summary for your records.

     The second scam was letters purporting to be from or on behalf of my mortgage lender suggesting that it is necessary to purchase special mortgage insurance to protect my family if I died.  While the concept is not truly a scam, the sheer quantity of letters (two dozen to date) and the presentation as being “sanctioned” by my lender, makes the requests very suspicious.  These companies simply monitor the public records for new mortgages being recorded and then pounce and are not sanctioned by your lender (though your own lender may also try and sell you the same product).

     Also known as credit life insurance, it is really a protection for the lender, not the borrower.  Mortgage life insurance costs more than regular life insurance for the same type or amount of coverage, the lender is the beneficiary of the policy, not your family, and mortgage life insurance is not required for taking out a loan (though some lenders try to imply that it is as the commissions are very high).

     The policy works by paying off your mortgage loan should the borrower die.  The costs is often rolled into the monthly mortgage payment or paid monthly to a separate insurance company.  State Farm, for example, sells this product at a cost of $258 a year for $100,000 of coverage on a 30 year mortgage.  They age limit this coverage to those under 45 at the time of the policy issuance.  This is a bad deal compared to regular term life insurance.  For example, Geico quotes a healthy 40 year-old male can buy a $500,000 term life policy with a 20 year rate guarantee for just $345 per year.  That much coverage under the State Farm plan would be four times greater.

     The lesson is to be wary of any unsolicited letters selling services that appear to be from an official source, whether from the local government or your home lender.  In most cases these are scams or over priced products.  A simple online search can easily confirm the validity and value of such products.

Michael J Posner, Esq., is a partner in Ward Damon a mid-sized real estate and business oriented law firm serving all of South Florida, with offices in Palm Beach County.  He specializes in real estate law.  They can be reached at 561.594.1452, or at mjposner@warddamon.com