Home Title Theft: What It Is & How To Protect Yourself
Home title theft is real. The FBI has identified situations in major American cities – Chicago, Dallas, Detroit, Los Angeles, New York City and Philadelphia – where home titles are being stolen. As identity theft is on the rise, more thieves are forging titles and stealing people’s property.
But what is home title theft? Are you susceptible to it? How do you make sure it doesn’t happen to you? And what do you do if it does happen to you?
This article will answer your questions and lay out the tools you need to protect yourself from home title theft.
What Is Home Title Theft?
Home title theft, also known as deed theft, is the process of fraudulently putting a house deed in another person’s name. A thief steals your identity, then uses it forge a deed, making it look like they’re the property owner.
There are several ways home title theft can occur:
- The thief can refinance the mortgage, cashing out the equity and walking away with the difference. On top of that, they won’t pay the new mortgage, meaning you’ll face foreclosure.
- They can open a home equity line of credit (HELOC) in your name, taking out the equity on your home and not making the payment.
- If they target an empty home – like unoccupied vacation homes or rental properties – they can use forged deed to sell the home and profit without you knowing.
- They can con seniors or homeowners in crisis with an offer of “refinancing.” The deal is then documented as an actual home sale, transferring ownership to the thief.
What Happens If A Property Title Is Stolen?
If someone steals your property title, a lot can happen. First, if the title is stolen and you’re not aware, you can lose your property. The thief could sell your property or refinance it, not pay the mortgage and allow it to enter foreclosure.
The theft of your deed is the result of identity theft. Criminals are using your identity to steal your home. Follow the steps on the Federal Trade Commission’s (FTC) identity theft site. These steps include:
- Call the companies where fraud occurred
- Place a fraud alert with your creditors and pull your credit reports
- Report identity theft to the FTC
- File a report with your local police department
The first step is incredibly important. Calling applicable companies, such as your mortgage lender and your title insurance company, will start the ball rolling. If you suspect title theft, you need to act quickly. Identity theft could also mean fraudulent purchases in your name on credit cards.
How Worried Should You Be About Your Own Title?
According to the FBI, 9,600 victims lost over $56 million in 2017 due to real estate mortgage and rental fraud. There are not specific numbers on home title theft, but many see these schemes as a fast-growing area of cybercrime.
While other areas of identity theft are more prevalent, your home is a big target. It has more value than a stolen credit card, both emotionally and financially. A stolen home deed can leave you homeless and ruin your credit.
The most likely targets of deed theft are those with significant home equity who are not suspecting fraud. Unfortunately, this means seniors. They’re targeted because they’re more likely to have spent their lives investing in their home. They’re more trusting and generally aren’t tech-savvy.
The other big target of home title thieves is people with second properties. Whether these are vacation homes or investment properties, these properties don’t get as much attention as a primary residence. If you own a property like this, be hawkish about receiving bills and notices.
The less attention you’re paying, the more opportunity thieves have. With more time, they’ll be able to commit the crime without you noticing.
How To Protect Yourself From Title Fraud
Luckily, there are plenty of ways to protect yourself from title fraud. Remember that thieves are looking for easy targets. If you’re vigilant, thieves are either going to avoid you or get caught in the act. The first step to protecting yourself is being aware. Continue to raise your awareness with the following tips:
Keep An Eye Out For Missing Bills
When normal bills start disappearing or changing at random, your deed status could be at risk. If you’ve noticed you never received a bill or an automatic withdrawal never happen, contact the company immediately. This could be a small error, or something could be amiss.
Either way, you could save yourself the headache by following up. If you miss these bills, you could miss foreclosure notices too. That would put you in a world of hurt down the line.
Monitor Your Credit Report
Regularly looking at your credit report is good practice, regardless of title fraud. You need to be up to date with payments and know there’s no fraudulent charges. Monitoring your credit report is an effective way to catch signs of title fraud.
You can sign up for a premium credit monitoring service to assuage any fears. These services offer many proactive credit protections. If you’ve been a victim of identity theft before, or just want the extra protection, consider paying for a credit monitoring service.
Make Sure You Have Title Insurance
The lender’s title is required by your mortgage company and assures them the title is cleared for sale. An owner’s title insurance policy is what protects you after you buy the property. It protects you in case any liens or claims are filed or discovered after the property becomes yours.
Title insurance is a one-time fee often included with closing costs when you buy your home. If you opted in on an owner’s policy title insurance, you’re covered.
Enroll In Title Protection Services
Title protection services – like Home Title Lock – have come under fire recently. Homeowners can check their title status/land records themselves or sign up for a free county consumer text notification service. Since these services provide already free and available information, many have discounted them as not worth it.
That may be true if you have an owner’s title insurance policy that would protect you in this scenario. But if you opted out of that, a service that monitors your records 24/7 for $15 a month could be worth it. While other types of identity theft may be more prevalent, your home is likely your biggest investment.
Beware of scammers posing as title protection services. As more people look to secure their titles, more scammers are taking advantage of them. Do your research and don’t make this decision on a whim. If someone’s emailing you or calling you to get you to sign up for title protection, they could be trying to con you.
The Bottom Line
While the internet and tech have brought us great things, the lack of security around our information means that it’s leaked out all over the web. Thieves are using this information to commit identity theft. They’re taking out lines of credit in people’s names and racking up massive debt.
They’re also using this identity theft to steal home titles. Imagine sinking your energy, money and time into your home, only to have someone forge a deed and sell it off under your nose. It happens to people every year.
Remember what this article covered. Focus on protecting yourself. Stay up on bills, monitor your credit report and take steps to be insured against title theft. Be aware of what criminals are doing to avoid getting conned out of your home.
Check out more content about home buying, managing your mortgage and more at the Rocket Mortgage® Learning Center.