In many ways, digital technology has made home closings easier than ever before. If there are mistakes with the closing paperwork, it may only take a few minutes for professionals to adjust the documents and get corrected versions over to the right parties.
It is easier for home buyers to find properties and to fulfill basic due diligence requirements before a transaction. Certain records, including recent transactions involving a particular parcel, can be available online in some jurisdictions. Unfortunately, improvements in technology almost always lead to people finding ways to abuse new technology. For example, the rise of artificial intelligence (AI) has created a new, frightening form of title fraud that could result in negative consequences for those who already own property.
What does AI title fraud involve?
There are several different types of AI software available that allow people to create written text, images and even video footage. Some fraudsters have begun using AI as a way of creating false identities. They use images of strangers or deceased people to produce AI-generated video footage.
They can then remotely attend meetings with lenders, real estate professionals and title professionals. Those with nefarious intentions have used AI-generated video to conduct fraudulent sales of properties in which they had no interest. The illegal sale of a property can lead to title challenges for the current owner even when they were completely unaware of the fraudulent activity occurring.
Title disputes can be a major headache
When an outside party believes that they have a valid claim to a piece of real property, the actual owner can face major challenges. They may need to hire a lawyer to assist them with a review of all relevant documents and state records. They may need to prepare for litigation, which can take months to complete in some cases. As the use of AI becomes more prevalent and as AI systems improve, the chances of fraudulent video and other forms of AI fraud increase.
Having the right support when dealing with title issues that may stem from fraudulent transactions can help those who have invested in real property protect themselves financially. Fraud involving AI can cause lengthy legal complications for the legitimate owner of a property, but legal intervention can potentially help.