Quitclaim deeds can facilitate smooth real estate transfers. Sellers sometimes use quitclaim deeds during real estate transactions to transfer their interest in the property to a buyer. Quitclaim deeds are simpler than other types of deeds in part because they do not imply any warranty or guarantee ownership rights. They allow the party signing the deed to give up their interest in the property.
In some cases, their ownership stake may not exist. Quitclaim deeds are valid instruments in many cases, but they are popular among those attempting to commit real estate fraud. When combined with artificial intelligence (AI) video generation software, a quitclaim deed could result in a fraudulent transaction and major economic setbacks.
What have scammers recently done?
As technology evolves, those trying to defraud others find new ways to execute their nefarious plots. In recent months, AI-generated deepfake videos have facilitated multiple fraudulent real estate transactions.
Unidentified parties posing as the owners of real estate use AI software to generate videos of a person who doesn’t exist for the purposes of title procedures. The alleged seller, possibly an AI construct created using images of a completely unrelated party, digitally executes a quitclaim deed and other documents, possibly while teleconferencing with title professionals.
The video generated is authentic enough to convince professionals that there is a real person talking to them and performing the digital document signing. However, the party posing as the owner could be in another state or country. They have no interest in the property and intend to disappear once they receive the buyer’s funds.
Unfortunately, the issue may come to light when the buyer attempts to record the deed, only for the true owner to push back against their claim of ownership. If the buyer does not have title insurance, their investment in the property could be at risk. The aftermath of a fraudulent transaction can take months to resolve. Those acquiring an interest in a property via a quitclaim deed may want extra support to ensure their protection prior to transferring any funds for the transaction.
Those preparing for real estate transactions, especially those making cash purchases, may need help validating title history for a property and ensuring that they have appropriate protections in place throughout a residential real estate transaction, and that’s okay. Being aware of how different types of documents and modern technology can contribute to fraud risk can protect those preparing for a major upcoming transaction.
