Home Title Theft: Should You Be Worried?
A thief can steal your wallet, your car, your money and even your identity. But could an identity thief also steal your house? The short answer is yes, home title theft can happen. But you should know the details first before you start worrying too much about this new form of identity fraud.
Nevertheless, the idea that someone is trying to steal the title to your home is horrifying. Imagine a thief forging your signature and secretly taking over the deed to your residence, and then actually taking out a fraudulent home-equity loan – against your equity. To give you some peace of mind, here is what you should know about home title theft, the chances of it happening to you, and what you can do to protect yourself.
What is home title theft?
Home title theft, also known as title fraud, happens when a criminal scours publicly available electronic property records to find a home that has accrued equity. Most frequently, they track down ownership of a home that’s either empty, a second residence or one occupied by an elderly resident.
The thief creates a new identity with supporting documentation like fake ID, Social Security card, and other personal identifiers. This is followed by the criminal forging the homeowner’s signature onto a fraudulent bill of sale and transfers legal ownership of the house to themselves. Home title theft is a new type of identity theft that also involves more serious forgery, real estate and mortgage crimes punishable with up to 10 years or more of prison time.
What happens if I become a victim?
Once the home deed is in the criminal’s name, they can take out home equity loans and disappear with the money, leaving the homeowner with the bill. Unfortunately, most people don’t find out that title theft has occurred until they receive a foreclosure notice in the mail from the bank holding the bogus home loan.
There are a few signs of potential title theft problems you can watch for including:
- You stop receiving bills at your residence
- Rising utility bills at vacant or second homes
- You stop receiving tenant rent payments
- Mortgage information from a lender you’ve never done business with
- New loans or lines of credit in your name
- Notice of foreclosure
If you suspect you have a home title theft problem, you’ll want to immediately call the mortgage lender and title company involved to identify and correct the problem. That will get the ball rolling.
Is home title theft a big problem?
You may hear blaring advertising on radio and TV telling you the home title and mortgage fraud is the fastest growing crime in America. It’s creative marketing, but at best this is very misleading as to the scope of the problem. There are very few statistics available for home title theft cases.
The FBI estimated a couple years back that 9,600 U.S. homeowners were victims of title fraud. That’s a microscopic percentage – slightly more than 0.0001% of the roughly 87 million U.S. homes owned. It was a cause of concern and gained attention because it was declared a new type of identity theft. To date, the Federal Trade Commission still does not report on home title theft cases.
So, does home title theft happen? Yes. Is it likely to happen to you? No. Is stealing a title and taking money from a fake home equity loan as easy as forging title documents on your home? No, because it involves obtaining and transferring a title or deed, deceiving a title company, plus county recorders of deeds as well as lenders, each of whom have several layers of protection in place.
All that said, home title theft is a new form of identity theft. Victims likely have larger identity fraud problems to deal with including compromised computers, email and social media accounts, legal battles, and a ruined credit profile.
Does home title insurance protect me?
Yes, but only if you’ve opted to purchase “owner’s title insurance” at your home closing. Owner’s 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.
Don’t confuse this with “lender’s title insurance” required by mortgage lenders at closing to assure them the property is free and clear of liens or claims before loan closing.
Do advertised “Title Lock” programs actually protect me?
Not really. You cannot technically “lock” your home title, and these programs are not title insurance policies. What they offer is periodic monitoring to alert you to after a change of deed has occurred – after your identity has been stolen and title fraud is already in full motion. They also talk of helping reclaim ownership of your home. The reality is, you never lost ownership of your home. A crime has been committed. You have an identity theft case, and a criminal legal battle to prove you did not sell your home and take out that loan.
You’ll need identity, credit and cybercrime fraud experts working on your behalf. Protecting against potential cases of home title fraud requires a much more comprehensive protection plan than the advertised title lock services.
What can I do to prevent this?
- Check your home title records. In most counties, you can access the county property ownership records online free of charge. If available, register for your county’s consumer notification service, which signs you up for alerts any time a document is recorded on your property.
- Use a licensed title agency. When purchasing a property, be sure to use a reputable, licensed title company.
- Purchase “owner’s title insurance”. Consider purchasing this at closing to protect against any claims or liens against your property now and in the future.
- Watch out for new or missing bills. When utility bills and other statements start disappearing or changing randomly, your identity and your home title could be at risk.
- Monitor your credit. Look for mortgage or home equity loan inquiries or activity you don’t recognize. Sign up for a premium ID theft and credit monitoring service to ensure you are always on top of changes to your credit.
- Evaluate your security practices. Home title theft is a digital crime. It’s a very good idea to make sure you are properly protected with your computers, mobile devices, passwords, financial accounts, and social media. If you aren’t super cyber-savvy, consider having security experts do a full cybersecurity checkup for you and your family.
The bottom line
There’s no need to pay additional or separately for a home title protection service. The best thing you can do to protect against this and all other forms of identity theft and cybercrime is to invest in a comprehensive personal and home cyber protection plan like iDefend that includes personalized, one-on-one expert service.
iDefend covers home title theft and all other forms of cybercrime and identity fraud. Discover a powerful new way to protect yourself and your family against all cybercrime, identity theft and online privacy risks in a single protection plan – with iDefend.