Home Title Theft: What It Is & How To Protect Yourself
While the internet and tech have brought us great things, data breaches, phishing scams and easier access to information means that personal details are more exposed. With identity theft on the rise, title theft has also increased.
Though much less common than other types of identity theft, more thieves are forging titles in an attempt to steal people’s property. But what is home title theft and who is susceptible to it? How do you prevent it and what do you do if it does happen?
We’ll take a look at the answers to these questions and 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. Using stolen personal information, title thieves can forge a deed, making it look like they’re the property owner.
Once a thief has your personal information, there are several ways home title theft can occur:
- The thief can refinance the mortgage, withdraw the equity and fail to pay the new mortgage, meaning you could face
- They could open a home equity line of credit (HELOC) in your name, taking out the equity on your home and not making
- If they target an empty home – like unoccupied vacation homes or rental properties – they can use a forged deed to sell the home and profit without your knowledge.
- They could swindle seniors or homeowners in crisis with an offer of “refinancing.” The deal is then documented as a home sale, transferring ownership to the thief.
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What Happens If A Property Title Is Stolen?
If someone steals your property title and you’re not aware of it, you could lose your property. The thief could sell your property or refinance it and not pay the mortgage which could result in a foreclosure. That said, if theft is identified early, taking immediate action can limit damages.
If you suspect title theft, follow the steps on the Federal Trade Commission’s (FTC) identity theft site. These steps include:
- Call the companies where the 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
Following these steps is important to alert your lender and officials of the potential fraud as soon as you are aware of it. Calling applicable companies, such as your mortgage lender and your title insurance company, will start the ball rolling on investigating the fraud.
If you suspect title theft, you may find additional signs of identity theft by pulling your credit report and checking your other financial statements. For example, you’ll want to check for any new credit cards opened in your name, personal loans or car loans that you didn’t apply for.
How Worried Should You Be About Your Own Title?
While your home is a big target, other types of identity theft are more common and easier to achieve unnoticed. The most likely targets of deed theft are those with significant home equity who are not suspecting fraud.
Unfortunately, this means seniors are likely targets. In addition to the high amount of equity in their homes, seniors can be easier targets for a number of reasons. Some seniors may be less tech-savvy or have health issues that make paying close attention to financial details more difficult.
Though title theft is less common than other types of identity theft, it does still occur. According to the FBI, 9,600 victims lost over $56 million in 2017 due to real estate mortgage and rental fraud. Currently, it’s hard to quantify how much of this fraud can be specifically assigned to title fraud. However, as identity theft has surged over the past 20 years incidents of title theft have also increased.
Other likely targets for home title theft are people with second properties. Whether these are vacation homes or investment properties, distance makes properties that are unoccupied more vulnerable to rental or sale schemes that would be immediately noticed on your primary residence. If you own a second home, be sure to carefully monitor bills and notices, make sure to visit the property regularly or have a trusted property manager check in on the home.
How To Protect Yourself From Title Fraud
Luckily, there are plenty of ways to protect yourself from title fraud. If you’re vigilant, thieves will avoid you or be quickly discovered. The first step to protecting yourself is watching for potential fraud. You can raise your awareness by taking the following steps.
Keep An Eye Out For Missing Bills
If normal bills start disappearing or changing, this could be a sign something is wrong. If you’ve noticed you never received a bill or an automatic withdrawal never happened, contact the company immediately. It could be a small error, or something could be amiss.
Either way, you could save yourself the headache by following up. Keeping on top of your mail and bills can give you an early alert if something unusual occurs. This will also make sure you won’t overlook a notice of missed payment or foreclosure.
Monitor Your Credit And Credit Report
Regularly looking at your credit report is good practice, regardless of title fraud. It’s a good idea to check your credit report annually. You’ll want to be on the lookout for unfamiliar purchases, credit cards you didn’t apply for, missed payments or other fraudulent charges. Monitoring your credit report is an effective way to catch signs of title fraud.
If you’ve been a victim of identity theft before, or just want the extra protection, consider paying for a credit monitoring service. You can sign up for a credit monitoring service to assuage any fears. These services offer many proactive credit protections.
Make Sure You Have Title Insurance
A title company ensures that the title of the property is free and clear. It protects against any claims or liens made against the property. There are two types of title insurance: lender’s and owner’s.
Lender’s title insurance 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 you purchase your home.
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, this will help protect you in the event of fraud.
Enroll In Title Protection Services
Title protection services – like Home Title Lock – have come under fire recently. This is because 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 an insurance policy, a service that monitors your records 24/7 for $15 a month could be worth it.
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 respond to unknown texts, calls or emails that could be phishing schemes or other cons. If you do sign up for title protection, make sure you contact a reputable company directly to enroll.
Home Title Theft FAQs
Now that you know the basics, let’s take a look at some frequently asked questions about title theft.
Is home title theft real?
Yes, 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 were stolen. That said, other forms of identity fraud are much more common and likely. Keeping an eye on your personal information, credit report, and mail can help you catch indications of identity theft before it escalates to property theft.
How common is home title theft?
Home title theft, while on the rise, is not particularly common. While many types of online crime are on the rise, other types of online identity theft are more common, including credit card fraud and wire fraud.
Is home title theft insurance necessary?
Currently, you can opt in or out of owner’s title insurance when you close on your home. However, buying title insurance when you close on your home is the smart choice. Once you’ve closed on your home it’s important to be on the lookout for scams offering fake title insurance or common scams offering title protection services.
The Bottom Line
Though title theft is not as common as other types of identity theft, many types of identity fraud have been on the rise in recent years. With more of our information accessible online and through breaches at large organizations, online identity theft has soared.
Home title theft is a serious threat that can have a devastating impact if it goes undetected. Luckily, there are steps you can take to protect yourself and your home, like watching for missing bills, keeping an eye on your credit report, and purchasing title insurance. Being proactive is key in preventing title theft and protecting yourself.
If you’re considering buying or refinancing your home, stick with a lender you trust. You can contact our Home Loan Experts at any time with questions or to apply for a mortgage today.