Property Fraud: Learn About the Laws and Safeguards With Holly Hemmrich, Register of Deeds

Protection From Losing Your House

Paul Winkler: Welcome to “The Investor Coaching Show.” I am Paul Winkler, talking money and investing, talking about investing, financial planning, and how to become an informed investor, because I believe that an informed investor and educated investor is less likely to be tampered with.

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They don’t take advantage of you when you know what you’re doing and why you’re doing it. That’s my philosophy, and I’m sticking to it. 

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Okay, so today’s no exception. Actually, I have here Holly Hemmrich, who is running for reelection on the Sumner County Register of Deeds. Actually, the reason we got in touch with her is because I see these commercials, and Holly, I really wanted to know what you had to say.

I see these commercials about, “Hey, somebody could get a hold your house and steal your house, and they could sign it over to themselves. They could mortgage it and they could go and take all your property. And then what would you do? How would you handle that?”

And it just reminded me so much of my early days in the insurance business, because that’s where I started, of all the types of insurance that I came to believe you probably shouldn’t have. It was a big waste of time and a waste of money. But I know that you have done some things in regards to this, and you’re really familiar with these types of programs, and you’re familiar with the ways to protect yourself. So yeah, just introduce yourself, how’d you end up doing what you do, and tell me a little bit about it.

Holly Hemmrich: Well, thank you. Thank you again for having me. I really appreciate it.

One thing that I have done is I’ve been with the register’s office for the past almost 18 years. And since being in the register’s office, I’ve worked in every aspect of the office, from working and verifying documents and receding the documents. I’ve also worked as chief deputy of the office, which is doing the business side of things. So I’ve been there for 18 years now and I love it.

PW: So you know the ropes.

HH: I love serving the public. And since then, I have actually worked with Representative Garrett on some property fraud issues.

PW: Yeah, that’s a name that goes way back for me.

HH: Yes.

PW: Yeah, because actually I was chairman of the Chamber of Commerce in Goodlettsville, and the Garretts are well known in the Goodlettsville community.

Property Fraud

PW: So this is something you are familiar with, and the idea being that people can come in and just kind of describe what supposedly is supposed to happen and what the risks are to individuals out there regarding somebody stealing their property or changing over things. And the identity theft that precedes it typically is what I understand.

HH: Yes. Well, usually the identity theft comes, and then you have documents that can be forged, and signatures can be forged. You have notaries who may be fraudulent notaries; you can have copies of different documents, things like that that come through our office.

Now, what I will say is we have a set policy of TCA laws for our office for recording. So we cannot record anything in our office if it doesn’t meet these specific requirements. A lot of these requirements contain original signatures, original documents, several different prepared by — things that liability would kind of fall back on, a notary signature and seal.

Someone to go to that notary to say, “Okay, was this recorded correctly because you signed this, you notarized this. Is this legitimate?” So a lot of it falls on us to look at the recording law side of it, but it also falls on the title insurance companies, the title companies who prepare these documents.

It falls back on that preparer or that notary. So that’s what you kind of seal a little bit of, is we’ve seen a lot of throughout the state of Tennessee — nothing in Sumner County that I can specifically say, but throughout the state of Tennessee — such as the Graceland property in Shelby County.

PW: Is that why this has gotten so much attention?

HH: I believe so. Yes, because there’s been property fraud for a while. Of course, it is a growing criminal activity throughout the United States. In Tennessee, we just didn’t really see that much of it until the big Graceland came about.

PW: Until it made the news on something that was really high profile.

HH: Yes. And unfortunately, in Shelby County, there is a lot of property fraud in Shelby County. There’s a lot of property fraud you’ll see throughout your four big counties, which are Hamilton, Shelby, Davidson, and Knox Counties.

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So you’ll see more property fraud in the more populated areas, of course. 

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But as far as recording laws go, we see this. We have certain things that we look for.

My employees are trained to look for these certain requirements and then look for certain things. And if they don’t look right, they can bring those documents to me, and I can look over them.

Safeguards Against Property Fraud

PW: So from what I had seen — I’ve done a little bit of research on this — a lot of times, if this were to happen, it typically happens on properties that the owners aren’t paying attention to, from what I understand.

HH: Correct. So a lot of individuals that have vacant land or even the elderly, that’s who they will focus on.

We’ve seen, actually, recently, there was a state representative that brought it to our attention that an individual’s property in Davidson County was taken, and it was vacant land that was, I believe, willed to him. I’m not 100% sure about that. So he was supposedly supposed to be paying property taxes on it and everything and apparently stopped getting a thing in the mail.

PW: He stopped getting a notice and probably didn’t even think about that, I hadn’t gotten a notice on this in a while, because they’re like glad they’re not paying taxes.

HH: Right. And so that’s kind of where … 72% of the population in Sumner County are homeowners, and your home is one of your biggest investments.

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So to protect your home, that’s why we have these TCA laws in place. That’s why we look through all this recording. 

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And then that’s why we also have the My Land alert system, which is free, absolutely free.

PW: Yeah, you have a lot of safeguards. And that’s where I was going because, like I said, there are a lot of times there are insurances that you can buy, and you can be insurance poor, as we used to call it.

And I see people buying types of insurance on just about everything, and they’re scared into this. And they don’t have enough money in retirement savings, and it’s typically because they’ve been spending so much money on things that they didn’t really need. So this was another one that I just had to shake my head and go, “Oh my goodness, more stuff.”

The Electronic Recording Act

PW: So tell us a little bit about, there was a house bill that was passed regarding this, and then there is a program that you had something to do with it. So tell us that story.

HH: Sure, of course. State representative, I’ve worked with him, Johnny Garrett. He worked with me. We talked about a bunch of the different ways that fraud has happened throughout the state of Tennessee.

One way that we have seen is through the electronic recording process. So several years ago, they passed a law, the Electronic Recording Act, where you can electronically record a document with electronic signatures and an electronic notary.

And therefore, electronically recording a document in our office has also passed through. And so anybody could electronically file a document in our office, and they have to swear to it by a certificate of authenticity that it is the original document that they’re submitting to us.

So we saw a couple of instances in different counties where an individual would come in and just record white-out on an original document that was prepared by an attorney, white-out areas, and type in their name and submit it to the register’s office. So what we did was we sat down with Representative Garrett and went over a law that could potentially omit just individuals being able to do that. It’s where the vendors who actually submit the electronic recording documents to us that get these customers, they have to vet who actually can submit a document to us electronically.

PW: Okay. So it’s another safeguard.

HH: Correct.

PW: And another hurdle to jump over in order to pull something like that?

HH: Correct. Otherwise, everybody would have to send in an original document to us to see in front of us.

If you are an individual, you have to bring that document in or you have to send that in, and it has to be original. But in this case, it can be that you are swearing that it’s a copy.

So these vendors, what they’re doing is they are submitting it to us saying they have vetted their customer, they know their customer is one of these few that we have on the list in the law, which is either usually an attorney title company, closing company, it can be a lender, it can be a bank, an investment firm, it can be a county government. Anyone like that can submit a document by e-file.

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It can’t just be anyone that can submit a piece of paper to our office. 

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So that’s one thing we’ve done. And then we’ve also put the liability there on that recording vendor that sends it to us. So then there’s someone to fall back on for that liability as well. If they submit something to us, then legal fees, things like that would be looked at by that electronic recording vendor.

PW: Yeah, that’s an incentive not to mess up.

HH: Yes, exactly right. And so we’ve looked at that.

My Land Alert System

HH: Then what we’ve got in place, I actually relaunched it this year, we have the My Land Alert system. That is actually something that we provide for Sumner County through our IT company.

And throughout the state of Tennessee, there are about 49 different counties that have the My Land Alert system. And then the other counties throughout the state of Tennessee, they have a different alert system through a different company, but it’s all free.

PW: Yeah. We had pulled up quite a list regarding this, the various counties around here. Sumner right here is where we are doing this, recording this. But Davidson County is on that, and good grief, Robertson County, Rutherford County, Trousdale. It looks like it’s a pretty comprehensive list.

HH: Yes.

PW: I’m almost wanting to ask, are there any that are not on there?

HH: Not that I know of. Now, if there are, they could be maybe smaller counties who just don’t have it in their budget to provide that. But none that I really know of. I believe everyone in Tennessee provides a type of service like that.

PW: Well, because in our research, we found that there was an interesting way that it was actually worded. Scott in our office actually did this research. And he said, “Well, it’s kind of an interesting law because it wasn’t necessarily funded. It was up to the counties to fund it.”

But apparently they’ve stepped up to the bar, and they’ve done it and they’ve actually funded it, which is good news that they’ve actually handled that. So I know that there is an ability to sign up for this program for the general public. And I guess when people come around trick or treating, you’re handing out stuff.

HH: Yes. Actually, speaking of which, I did last night at Drakes Creek Park in Hendersonville. We had all the families come through, and we gave their kids candy and gave the parents a pamphlet that has the information on My Land Alert and my reelection here in May.

But something I do want to state with the My Land Alert system, everybody is worried. They think there’s some type of protection, like some type of a lock, because a lot of people sell this, “Oh, I can lock your deed for you” type insurance.

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There’s nothing really that locks anything. What this is, it’s an early detection. It assists in early detection for property fraud.

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PW: Yeah, because I had actually heard that it’s not foolproof. So you can sit there and say it’s foolproof, but it’s not even with the insurance that they’re trying to sell or anything like that. But you have so many things that are so many barriers. So yeah, keep going.

HH: Yes. Criminals are smart. I tell you, I have seen some smart criminals and I’ve seen some dumb criminals.

PW: That’s true. There are TV shows made about that.

HH: Yes. With property fraud, it seems like they’re getting smarter and smarter every day. And so that’s one of the things we’re trying to stay ahead of is to kind of cut them off at the pass.

How Early Fraud Detection Works

HH: So this process here, it’s an early detection service. So what you do is you sign up for it.

And the way I try to explain to people is we index by whatever the document says. So say your name is John A. Doe, we’re going to index that, just like that. So, depending on how the document reads, that’s how we’re going to index it, and that’s how it’s going to send you an alert.

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So I suggest every individual, every homeowner in your household, sign up for this individually and put your name in three different ways. 

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And that way, you can kind of get those alerts in three different ways.

PW: Oh, interesting, in three different ways. Okay, so any way that your name might be referred to out there, you sign up under that different variation. So it may be your first name, middle initial last name, and it might be your first name, middle name, and last, it might be your first initial and your middle name if you go by that.

HH: Correct. Yep.

PW: Okay. So that makes a lot of sense. Okay, so where do they actually go to do that?

HH: So you can go to www.mylandalert.com and that will then send you there, you go to register, and then it’ll send you an email with a link that you then process an account with them.

PW: Okay, so mylandalert.com. And from the research that I’ve done, it’s like you put in your email address, you put a name, and you come up with a password is what I’ve seen, something like that.

And then you specify the account, the name, and you said three different ways. So that’s really good to know that.

And what I’ve seen, it says that every day at midnight, the servers check the register of deeds records, making sure everything looks okay. And if a document matches your name on the alert list, you’re going to get an email with the details.

HH: That’s correct.

PW: And that’s how we make sure that this happens.

HH: Yes. Now I will say, so when this happens and you see something that has been recorded and you’re unsure of what it is, give us a call. That’s what we’re there for.

We’re here to serve the public; we’re here to serve the citizens of Sumner County. Give us a call. We will look that up for you and we will see what that document is, explain what that document is.

Sometimes it could be just an assignment of a mortgage. Sometimes people will have a mortgage, and the bank assigns it to another bank. Sometimes that’s all it is. But you still want to know what’s being recorded in your name because you may not get that information through the mail.

Closing Title Insurance

HH: So another issue, too, is if you do see something and it is fraudulent, you usually have to take steps to go to an attorney. You have to take legal steps.

That’s another thing when you’re closing title insurance, when you’re closing through your title company, that’s where that kind of comes in. That title insurance will help you with those legal fees down the road.

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If you didn’t get title insurance when you closed, I would suggest speaking to someone about the title insurance. 

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But don’t be confused with closing title insurance and something like a property lock system.

PW: Right. Yeah, totally different thing right there.

HH: Totally two different things, yeah.

PW: So, who did they talk to regarding the title insurance? Again, I can’t think of any situation where I haven’t had title insurance. You go to a closing.

HH: Yeah, you can talk to an attorney or a title company. Any kind of property title company would help you with that.

PW: How would you know that you didn’t have it? I can’t imagine somebody not having it.

HH: Right. Sometimes you may not have it if property is, say, willed to you, if all of a sudden you inherit grandma’s big plot of land, and maybe it wasn’t insured, and here you get the piece of property.

Or if something is quit claimed to you, say somebody wants to gift you property or you gift somebody property, anything like that, through a deed. If you do your own deed, I don’t like to say you can prepare your own deed, but go through an attorney, your title company.

PW: Yeah, it’s risky territory. Right?

HH: It’s risky.

PW: Oh, it is. It’s like people asking me all the time, “Paul, should I do my own will?” And I’m like going, “I don’t know. But I don’t love that idea because there’s so many things you can miss if that’s not your business.”

HH: There is.

PW: It’s too easy to make a mistake.

HH: Yes. And with title insurance, you’ve had somebody who’s done a title search for you. And that’s another thing, too, is a lot of people think we do searches when we record the documents, but we don’t.

That’s what the title companies do prior to recording. And so that’s why you get that title insurance, because the title companies have already done that for you before closing to make sure that everything is in line for you.

PW: Okay, very good. So I guess a big takeaway right here is the mylandalert.com website: Go set up an account. It’s kind of like me telling people, go get a Social Security account, make sure that you have a name in Social Security.

I always tell people that because I want them to have a Social Security account in their name or be online so that somebody else doesn’t beat them to it. And it’s kind of the same thing here.

HH: And this is free.

Beware of Scams

HH: Also, beware of things that you get in the mail. There are several scams that go around out there saying, “Oh, you can get a copy of your deed for $129.” Please don’t do that. You can come to our office and get it for 15 cents a page.

PW: I love that. No, thank you for saying that. That’s really good. Okay.

HH: There’s certain different things that just kind of circulate.

PW: It just makes me crazy.

HH: Yes.

PW: Holly, I had actually attended a presentation recently, and this guy, he’s a behavioral economist, and he had this chart of various ages, in your 30s, your 40s, your 50s, your 60s. And it just blew my mind how, as you went along the chart, the bars got taller and taller and taller.

And what they were representing is fraud at various ages and how older people can get taken advantage of because A, they’ve got more money. And B, a lot of times what happens is as much as we love to think our mental faculties get better and better embedded, a lot of times we don’t. They slip, and life gets busy.

HH: Yeah. And I know a lot of individuals too, the older that they are … there’s things that are more high-tech nowadays, and the older individuals, it worries them, it kind of scares them in a way.

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People prey on that. They use those scare tactics. So always just kind of double-check or speak with your kids about it, if you’re unsure about it. 

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And just kind of double-check the fine print on those documents.

PW: Fantastic. Well, thank you so much for coming in here today and talking about this.

HH: Thank you.

PW: It’s Holly Hemmrich, she’s the Sumner County Register of Deeds. And is there a place to get ahold of you or get in touch with you?

HH: Yes, you can give me a call at 615-452-3892. We are located in Gallatin in the Taj Mahal, as people like to call it, in the administration building there in Gallatin.

PW: I know it’s getting nice there.

HH: Yes.

PW: Yeah, we got an office in Gallatin, and literally one of my guys talks about what’s been going on around there. So the number again, one more time.

HH: It’s 615-452-3892.

PW: All right, Holly, thank you so much for coming on here.

HH: Thank you.

PW: And I appreciate you and love the work you’re doing.

HH: Thank you. Appreciate you.

Advisory services offered through Paul Winkler, Inc an SEC registered investment advisor. The opinions voiced and information provided in this material are for general informational purposes only and not intended to provide specific advice or recommendations for any individual. To determine what investments are appropriate for you, please consult with a financial advisor. PWI does not provide tax or legal advice. Please consult your tax or legal advisor regarding your particular situation.