Zombie Loans, Deed Theft, and Vacant Land Scams: How Fraudsters Target Homeowners and How to Protect Yourself
Ryder Christ
SANTA BARBARA, Calif. — Imagine discovering you owe a loan you never knew existed or that someone just sold your land without your knowledge. Local and federal officials are warning that so-called “zombie loans,” deed theft and vacant lot scams are on the rise, putting homeowners and land buyers at risk.
“Unresolved loans and vacant lot scams are on the rise,” said Kristina Perkins, Chief Investigator with the Santa Barbara County District Attorney’s Office.
A representative from the Santa Barbara County District Attorney’s Office will join our discussion on zombie loans, deed theft, and vacant lot scams and share practical steps to stay safe. Join us Thursday, August 28, at 6 p.m.
Zombie loans resurface
“Zombie loans” typically involve second mortgages or home equity lines of credit that borrowers believed were settled years ago. In recent years, debt buyers have revived old liens, sometimes demanding tens of thousands of dollars in interest and fees.
In some states, collectors are making surprise foreclosure threats on long-dormant second liens, sometimes aggressive enough to alarm homeowners.
“Some debt collectors, who sat silent for a decade, are now pursuing homeowners on zombie mortgages inflated with interest and fees,” said CFPB Director Rohit Chopra.
Federal rules prohibit suing or threatening to sue on debts past the statute of limitations, but complaints continue to rise. Nearly 110,000 debt-collection complaints were filed with the CFPB in 2023.
“These cases particularly impact older, lower-income borrowers and communities of color,” the CFPB noted.
Deed theft and title fraud
Another growing concern is title fraud, also known as deed theft. Scammers forge signatures on property deeds and record the fraudulent documents with county recorders, transferring ownership to themselves or shell companies.
“Your home could be stolen, on paper, without you ever knowing,” Perkins said.
Officials say criminals frequently target vacant homes, rental properties, elderly homeowners and those who own their homes outright. Victims often discover the fraud only when they receive a foreclosure notice or run into title problems while trying to refinance.
In New York City alone, authorities reported more than 3,500 deed-theft complaints over the past decade, underscoring the scale of the problem.
Vacant lot sales scams
Vacant land has also become a lucrative target for impersonation schemes. In these cases, criminals pose as out-of-state owners and attempt to sell empty parcels at below-market prices.
“These bad actors are able to use electronic communications to convince everyone at every level of a property sale that they’re the rightful owner of the property and, therefore, the rightful recipient of the sale proceeds. But they don’t own the property,” explained FBI Special Agent Joe Cardosi.
“The seller asks for an all-cash sale and a quick closing. Within weeks, the deal can be done,” the FBI warned.
The FBI says these scams can generate anywhere from $10,000 to $1 million in a single fraudulent sale. A 2024 survey by the American Land Title Association found that 28 percent of title companies encountered at least one impersonation attempt in the prior year, with 19 percent reporting attempts in April 2024 alone.
How to protect yourself
Experts recommend several steps to prevent becoming a victim. Homebuyers and owners are urged to verify identity using government-issued identification and to check seller information against tax and county records. They should work with reputable title companies and avoid remote closings when possible.
Officials also encourage homeowners to enroll in county property fraud alert systems, which notify owners if documents are recorded against their property. For those contacted about old debts, consumer advocates say it is essential to request written validation before paying. In most states, even a small payment can restart the statute of limitations on expired loans.
Where to report fraud
Authorities urge anyone targeted by these schemes to report suspicious activity. Unresolved or questionable debts can be reported to the Consumer Financial Protection Bureau. Cases of deed theft or fraudulent land sales should be reported to county recorders, local law enforcement or the district attorney’s office.