Fraudulent Title Transfers a Snap in State : Law: In California, property can be transferred with an owner’s signature on a grant deed and a notary seal. The county recorder’s office is not required to verify the real estate documents it registers.

Authorities express frustration at the difficulty in catching unscrupulous real estate operators.

Unlike many other parts of the country, the law and real estate practices in California make it very easy to fraudulently transfer title of property.

The transfer of property can be achieved with nothing more than an owner’s signature on a grant deed and a notary seal. The county recorder’s office is not required to make any effort to verify the real estate documents it registers.

Once the document is recorded, it automatically becomes part of the official title chain, and the new owner--legitimate or not--can take out loans or even sell the property.

“It’s easy to do and a relatively large amount of money is involved,” said Sheriff’s Detective Tom Hart. “The risks are minimal (to unscrupulous operators) and the rewards are great.”

When fraud is carried out, it is often buried in a long string of paper work. Investigating such paper trails requires real estate expertise that law enforcement agencies complain they do not have.

And in places where there is expertise, such as the state Department of Real Estate, there are no criminal investigators. Pending legislation, however, would give real estate regulators search warrant powers they currently do not have, thus strengthening their ability to build cases against lawbreakers.

Officials also point to laxity in the regulation of the notary public business. In several court cases involving real estate fraud, serious questions have arisen about the legitimacy of some notary seals. The signatures of homeowners known to be in convalescent homes or hospitals have in some cases appeared as notarized authorizations to sell property, according to lawsuits.

Currently, the state employs only three investigators for notaries public. There are about 150,000 licensed notaries public in the state.

Prosecutors say there is often confusion about whether the abuses committed fall under criminal or civil jurisdiction. The statute of limitations is relatively short--three years for forgery and two for fraud--and has often gotten dangerously close to expiring by the time the victim realizes his home is no longer in his name.

Further, prosecutors and investigators say they often need multiple victims before a clear pattern can be established sufficient to incriminate those responsible.

There are laws on the books that would prevent some of the abuse, such as the Home Equity Sales Contract Act and the Mortgage Foreclosure Consultant Act, both of which lay down rules for how contracts should be written and how sales of foreclosure property should be conducted. But many people find ways around the laws or ignore some of the requirements, public-interest attorneys say.

Besides, experts in real estate say, there is little regulation that can stop frauds that work because of the gullibility, desperation or ignorance of homeowners.

“Basically, you’re trying to protect people from themselves,” said James N. Laichas, senior vice president of Ticor Title Insurance.

Sometimes, equity schemes straddle a narrow line between what is legal and what is not, what constitutes questionable business ethics and what constitutes a crime. For example, lenders are not legally required to verify the credit-worthiness of someone taking out a home equity loan, but many of the loans carry terms or payments that are far beyond what the borrower can meet, and he is certain to default.

“When there is forgery, it is clearly a crime,” said Compton Deputy City Atty. Wilmont Odom. “The problem is those who dance on the edge of the law.”

Whether they can be prosecuted or not, questionable property transfers increasingly are ending up in court.

Paul E. Lee, director of litigation for the Legal Aid Foundation of Los Angeles, has represented several defendants in alleged equity fraud cases. “At any one time, we have 30 to 40 cases in court,” he said, “and a new one comes in virtually every day.”