What Is Home Title Theft?
Home title theft or deed fraud falls under the umbrella of identity theft, where the thief steals the title of the home to gain ownership of it. You may have heard the commercials on TV and Radio with high profile celebrities, all touting the ominous warning that your title may have already been compromised. Then there’s the testimonial of the person who was evicted from their house because of Title Theft, it sounds horrible. The next proclamation is that you can protect yourself by purchasing Home Title Theft Insurance – yep, they want you to purchase the product they are promoting.
Like any other form of theft, home title theft could be devastating. If it were to happen, the real owners have to deal with the struggles of losing their home, a damaged credit score, and the heavy legal fees associated with getting their property back.
How Common Is Home Title Theft?
The simple answer is that it can happen, but it is extremely rare. The claims made on radio and TV are simply stated, over the top. If you have ever purchased a home, we have purchased 8 of them over the course of our marriage, you know that there are so many safeguards in place, that the thought of someone forging documents to obtain the title of your home seems nearly impossible
The Loophole – Quick Claim Deeds:
As I mentioned above, to legitimately purchase or sell a home, the process is daunting, and varies from state to state. In some states, in addition to the real estate agents, a Lawyer is required for both the seller and buyer to complete the transaction. Then there are credit checks, income and employment verifications for mortgages, appraisals, title searches & title insurance, etc.. all of which are tedious and, in most cases, very thorough.
However, there is a loophole that scammers will try to exploit, the Quick Claim Deed. This is a legitimate process typically used to quickly transfer a property to a child from a parent, a spouse in a divorce, or from even from sibling to a sibling. The issue is with these deeds, is that no title search or insurance is required.
With how readily information is accessible, and with all of the data hacks that seem to happen more and more frequently, a scammer can easily obtain all of the needed information (mostly from the dark web) to file a quick claim deed.
If the scammer is successful and goes undetected for any length of time, they may be able to open lines of credit and siphon off the equity in the property without the rightful owner knowing about it.
Who is most Vulnerable:
Older adults may be more vulnerable to the problem due to their lack of awareness about different types of scams, and scammers will typically target and prey on this demographic. On top of that, elderly folks are much more likely to have paid off their mortgage, which makes them a lot more attractive as victims due to the equity in their house.
People With High Net Worth
People with high net worth and a lot of home equity become attractive targets for thieves who want to use their homes as collateral for heavy loans.
People With Information online
Since a lot of personal information is needed to pull off any identity theft, people with a large online footprint become likely targets. With the internet being so common these days for so many things, internet safety practices are diminishing. As a result, many people put their info online without considering that this makes them more susceptible to fraud.
People Who Own Multiple Properties
If you own more than one property, it may be easier for thieves to use your identity and take loans out on other properties. Most people stay vigilant about their house, but with multiple properties, it’s possible your attention is not as focused.
How to Prevent Home Title Theft
If you listen to the commercials, you can buy Home Title Insurance, and that will work. However, the real issue is identity theft in general, not Home Title Theft. As we discussed, even if a Title is stolen, subsequent steps must be taken to do anything with it, and there are safeguards in place for those steps.
So, there is very little need for concern for Home Title Theft, however, identity Theft is becoming more and more prevalent. We have been victims multiple times over the last few years. We’ve had a fake tax return filed in our name with or confidential information, and our credit and debit cards have been compromised on multiple occasions. If you have no identity theft protection, you could be susceptible to subsequent damage from identity theft, or even Home Title Theft, so having some type of online identity protection in place is almost an imperative these days. We personally have LifeLock, and have been alerted multiple times of fraudulent credit activity due to data breaches where our identity has been stolen.
So, be diligent with respect to safety regarding your online presence, use a good VPN and a sign up with a credible identity theft program.