One of life’s greatest pleasures can be being a business or property owner. In addition to giving you a safe and stable place to live, owning property provides you access to important resources for wealth management, credit building, and financial planning. However, a little-known challenge for real estate owners is the risk of home title theft.

Although it may not seem common, home title theft does occur occasionally. In fact, it has increased in numerous US cities.

The following guide will take you through the steps on how to prevent home title theft and the necessary actions you must take:

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Understanding Home Title Theft?

Also known as deed fraud, home title theft is a sophisticated form of identity theft where criminals manipulate property ownership records to transfer the title of a home from the rightful owner to themselves or an accomplice.

This fraudulent activity can have severe financial and emotional repercussions for homeowners, often going unnoticed until significant damage has been done.

How Home Title Theft Occurs?

Deed fraud is particularly prevalent in dilapidated neighborhoods and run-down houses. Criminals may seize control of a property if the owner passes away and their heirs are not quick to claim the deeds.

Home title theft typically begins with identity theft. Criminals obtain personal information through various means, such as phishing scams, data breaches, or even dumpster diving for discarded mail containing sensitive information. Once they have enough details, they can forge documents to impersonate the homeowner.

  • Research and Target Selection: Thieves often target homes with substantial equity or those that are mortgage-free. They research property records, usually available online through county records or public databases, to find suitable targets.
  • Forging Documents: Using the stolen identity, criminals create fake identification and falsify documents such as deeds or title transfer forms. These documents are then submitted to the relevant local government office for processing.
  • Exploiting the Property: The thief might then take out loans against the property, sell it to an unsuspecting buyer, or even rent it out. In some cases, the homeowner only discovers the fraud when they receive foreclosure notices or eviction orders.
  • Recording the Fake Deed: The forged documents are recorded with the county recorder or clerk’s office. Once recorded, the property title shows the thief or an accomplice as the new owner.

Steps on How to Prevent Home Title Theft

Monitor Your Inbox

If you suddenly stop getting bills and other essential mail, it means someone has changed your address without your awareness. Make sure your mortgage statement and deed are stored securely. Keep track of other important documents you might have.

Keep Track of Your Credit Report

Every year, you have the right to a free credit report from at least three credit reporting bureaus. You can identify questionable behavior, such as newly opened accounts in your name and unlawful adjustments to already-existing accounts, by routinely checking your credit report.

Don’t Reveal Personal Information to Everyone

Bank statements contain personal information and should be destroyed properly, such as in a shredder. Keep your Social Security card and birth certificate in a safe place, never on your person. Share sensitive information only with people you trust.

Keep Tabs on Your Property

If you spot any unusual activity in your area, report it immediately. This includes the departure or arrival of strangers near or from your home. Installing security systems not only protects vacant homes but also discourages squatters from going through your things and taking important documents like deeds and mortgage statements.

Consult with a real estate attorney about placing additional protective measures on your property, such as setting up a trust, which can deter fraudsters.

Secure Title Insurance from the Owner

If you didn’t sign up for owner’s title insurance at closing, get it now. When you are the property owner, this policy can defend you from claims or liens made against it. While the lack of title insurance may make title protection services necessary, they are often a fraud.

Notarization and Witnesses

Always ensure that property transactions are properly notarized and witnessed. This adds an additional layer of verification that can help prevent fraud.

What a Criminal Does with Your Home Title

When a criminal gains access to your home title, the consequences can be severe. Here’s what they usually do:

Rent the Property Out Illegally

Deed fraudsters collect monthly payments from gullible renters to trick the tenant into thinking they are paying off their house when, in reality, the con artist is only stealing their money. They might also advertise the property as “rent-to-own.”

Open a (HELOC) in the Victim’s Name

With this kind of loan fraud, the perpetrator can take out any equity in the house in the victim’s name and avoid having to pay back the loan!

Sell the House to a Serious Buyer and Take the Profit

This is a typical strategy for rental or vacant vacation houses. The fraudster makes fake title papers, clocks the property to ensure that no one is representing it, puts their “For Sale” sign on it, and markets it secretly.

Reverse Mortgage Scam

This crime frequently results in the family losing their house. Even worse, if the bank or mortgage lender places a lien on the property, there’s a chance of foreclosure.

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What to Do If You Have Been a Victim of Home Title Theft?

The Federal Trade Commission (FTC) gives the following guidelines to people who have been the victim of home title theft or those who might be a target in the future:

  • Contact any businesses where you know fraud has occurred.
  • Inform the FTC about your identity theft situation.
  • Get a copy of your credit reports from different credit reporting bureaus.
  • Make a formal report to the police department in your community.

Final Thoughts

Being a federal offense, home title theft will surely result in jail time for the offender. Sadly, because identity scams of this kind are so sneaky, it's frequently too late to report them to the FBI.

It may be challenging to apprehend the thief and retrieve the property if the fraud was carried out under a false name or through a shell company or if a long period has elapsed since the title transfer.

Take preventative measures to keep your belongings safe. Install identity theft protection and credit monitoring so that you can be notified as soon as there is any questionable activity. Your house and family will be safer the sooner you take action.

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