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Q: I saw on the news that criminals can steal your home title through identity fraud. Is home title theft real? How common is it?
A: Yes, home title theft is real. Identity theft, in general, can be damaging for victims for a variety of reasons, from maxing out credit cards to lowering one’s credit score. It’s also technically possible for scammers to steal the title to your home if they’ve uncovered your sensitive personal information and created fraudulent documents to transfer its ownership to their name.
While that may sound worrying, the good news is that home title theft is not as common as you may think, and there are multiple ways homeowners can protect themselves against home title fraud. Read on to learn more about title fraud, potential warning signs you may be a victim of title theft, and how to protect yourself and your home from fraudsters.
What is home title theft?
Home title theft (also known as title fraud, deed theft, or house stealing) is a crime that combines identity theft with mortgage fraud with the goal of stealing homes. In home title theft cases, con artists choose a homeowner or property to target. They then steal the homeowner’s identity by acquiring sensitive personal information, such as their social security number and date of birth. Next, scammers use this stolen information to transfer a property’s title to their own name. Once the home title is in the scammer’s name, they may try to sell the property for their own profit or borrow money against your home equity.
Home title theft is not a common type of property crime.
While scary, deed fraud is an uncommon occurrence for most homeowners. Anyone can be a victim of home title theft, but the FBI says that house stealing is not a common real estate crime committed against homeowners. In 2021, there were 11,578 reported cases of real estate fraud, totaling more than $350 million in damages. However, these numbers include all types of real estate fraud, and home title fraud represents just a small portion of those crimes.
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Scammers are most likely to target certain types of homeowners.
Thieves of house deeds are most likely to target properties owned by people who meet certain criteria. Here are the homeowner characteristics scammers are most likely to target:
- The homeowner is part of a vulnerable group, such as seniors. Scammers often will target older people or other vulnerable homeowners by offering to help refinance their homes. In reality, they may be taking their personal information to steal their home title.
- The homeowner owns a vacation home or rental property. Since these properties tend to be vacant more often than a primary residence, owners may not monitor the property as closely, making them more susceptible to fraud.
- The homeowner is a victim of identity theft. If fraudsters already have someone’s personal information, such as a social security number and date of birth, they may be able to use that information to pose as the victim and transfer property into their own name.
- The homeowner has paid off the property loan and has no existing mortgage. Similar to owners of second homes, homeowners who no longer have a mortgage may not closely monitor their credit score or home equity. Additionally, these are ideal victims of scammers borrowing against home equity since their targets own their homes in full.
Possible victims of home title theft can watch for a number of warning signs.
Unfortunately, this type of crime can be difficult to detect without close monitoring. That’s why it’s important for property owners to watch out for warning signs that may indicate they are a victim of deed fraud. Look for these signs to make sure your property is safe:
- Mail about an unknown mortgage policy. If you receive mail about a mortgage policy you didn’t apply for, fraudsters could have tried to take out a mortgage on your property.
- Strange accounts on your credit report. Check your credit report regularly (most banks offer free credit reports). If you notice any unusual accounts or activity on your report, put a freeze on your credit and report it to the Federal Trade Commission’s identity theft site.
- Bills stop arriving. If you stop receiving your regular mail, including utility bills or other property-related mail, check your property records. Scammers may try to hide any fraudulent activity surrounding your home title by changing the mailing address for your home’s bills.
- Notice of unpaid bills or a foreclosure on your property. If you receive notices of unpaid bills, late payments, or a foreclosure on your home, your title may be compromised. Criminals can steal home titles, borrow against the home’s equity, and then let bills go unpaid.
If you notice any of these signs or other suspicious activity related to your home deed, put a freeze on your credit, contact your mortgage lender, attorney, and local authorities, and report it to the FTC.
Title lock insurance is often less protective against fraud than some homeowners would hope.
Some homeowners may consider title lock insurance, also known as title theft insurance, which is advertised as a service that offers home title protection. Usually, this service provides home title monitoring for homeowners and notifies them of suspicious activity. If title theft occurs, however, title lock insurance does not guarantee payment for fees associated with restoring the title to its rightful owner.
While it can be handy to have a company monitoring home title activity, some local governments will provide this information or monitoring for free online. Homeowners should check with their county to see what options are available and to determine if investing in insurance to protect their home title is still worth it.
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Identity theft protection and title insurance are the best ways to prevent home title theft.
Vigilance is key when it comes to protecting yourself from identity theft and home title theft. An important part of the home-buying process, taking out a title insurance policy—which is different from title lock insurance and will cover financial loss related to title defects—is one method to protect yourself. Homeowners should also take general precautions to avoid identity theft, such as credit monitoring and keeping their personal information secure.
It never hurts to be cautious, but it’s important to remember that home title theft is rare and unlikely for most homeowners. Following these steps can help keep your identity and your home title safe.
