Homeowners are sometimes worried about thieves breaking into their house, but they rarely worry about criminals actually stealing their house. Maybe they should.

A new scam has emerged, taking advantage of the traditionally relaxed manner in which county recorders offices around the country operate.

The crime involves a scammer creating a fake deed from readily-available sample document forms, then recording the deed at the local land-records office without the true owners knowledge. The thieves often use fake names and corporations to record the deed.

With their new, and very legal deed, they apply for a mortgage. Assuming the fraud is not caught first during a title search, the bogus borrower pockets the loan money and disappears.

Months later, after no loan payments are received, the lending institution starts foreclosure proceedings on the property and the unknowing owner. The homeowner must then hire a lawyer and seek a court order to overturn the fraudulent deed.

County recorders offices have always operated with a high degree of customer convenience in recording deeds and other notarized documents, and indeed, state law does not allow them to demand proof of identification from customers, said Indiana Attorney General Greg Zoeller. Criminals are exploiting a loophole to fraudulently transfer ownership of properties in an effort to steal money from lenders.

Zoeller said the property fraud scam has begun to emerge in Indiana and he has joined the Indiana Recorders Association and the Association of Indiana Counties in warning the public about the potential risk.

The actual homeowners, through no fault of their own, are at risk of losing their home to foreclosure, Zoeller said. Correcting the problem and clearing the cloud off the title could cost the homeowners thousands of dollars.

Allen County, Indiana Recorder John McGauley said the problem is fairly small in scope, and he and his colleague want to keep it that way.

Because thieves typically wait a period of a couple months after recording the deed and before applying for a loan, if detected in time, fraudulent deeds can be intercepted. Deeds are a public record available at the county recorders office. Homeowners with questions can contact their local recorders office to verify deed information.

Victims of property fraud are most often retirees whose first mortgages are paid off and whose homes are vacant — either because the elderly homeowner has moved to a nursing home or relocates for part of the year.