Read  Suzanne Hollander’s  comments in MoneyRates, Learn to Prove Property Ownership/Title + Stop Title and Deed Fraud.

What is Home Title Fraud, and How to Prevent It

Erik Martin | Money Rates Columnist. Posted: July 16, 2020 Personal finance 8 min read

When you’re a homeowner, burglars aren’t the only crooks you should be concerned about infiltrating your property.

An even bigger theft is home title fraud.

This occurs when a bad actor alters ownership of your property title or deed by putting their name on it. And it can cost you plenty in terms of dollars, the time you’ll spend fixing it, and the damage it causes to your credit.

Don’t assume home title fraud can’t happen to you.

Learn the facts. Know the warning signs. Take action steps if you think you’re a victim. Find out how to safeguard your credit, your property and your savings from title fraud. And consider home title monitoring protection.

What Is Home Title Fraud?

IN THIS ARTICLE

• What Is Home Title Fraud?
• How Does Home Title Fraud Happen?
• Consequences Of Home Title Fraud
• Who is at Risk for Home Title Fraud?
• Watch Out for These Red Flags
• What To Do If You Think You’re A Victim Of Home Title Fraud
• How To Protect Yourself Against Home Title Fraud
• What Is Home Title Lock And Do You Need It?

Home title fraud is an involuntary transfer of property ownership without the true owner’s consent or knowledge.

In this scheme, someone tries to transfer ownership (title) of an owner’s property to someone else. Or they borrow money using someone else’s property as collateral.

Suzanne Hollander is a Miami-based attorney and part of the real estate faculty at Florida International University. She explains that home title fraud is often misunderstood.

“Home title fraud is essentially a burglar stealing your entire house and maybe even selling it to someone else while you are living in it – and without your knowing about it,” she says.

How Does Home Title Fraud Happen?

Hollander explains that property ownership is normally proven by a piece of paper called a deed. Your deed is sent to your county’s clerk of courts and recorded in the public records of the county where your home is located.

In many states, for a deed to be recorded, it must be signed by the seller (also called the grantor), two witnesses, and a notary.

(Note that the court clerk verifies that these legal formalities are met. But the clerk isn’t responsible for contacting the seller and buyer and confirming that the transaction was voluntary and legal.)

In other words, just because a deed is recorded in the public records doesn’t mean it’s accurate.

“Home title fraud is a forged deed,” Hollander adds. “That means someone signs your name to a deed as the grantor. This makes it appear as if you granted (sold) the home to someone else – the grantee. They get your fraudulent signature notarized and witnessed and sent on to the county recorder. Then, the new grantee is placed on the new deed to the property, showing the new grantee as an owner in the county public records.”

And that’s where the danger lies.

The deed-fraud perpetrator can now attempt to sell the property to another party or obtain new loans using your property as collateral. That’s because the public records show it as titled in their name, meaning a bank’s title search would show the name on the deed as the owner of the property.

Consequences Of Home Title Fraud

Make no mistake: Home title fraud is serious. Left unchecked, a victim can lose their home as a result of this crime. And getting the problem remedied can be difficult and quite costly.

“The legal fees required to resolve the consequences can be in the tens of thousands. It will require filing a complaint in court. And the lawsuit involves numerous parties, including your title company, lender, and buyer or seller,” says Victor Liu, partner with Clear Skies Title Agency.

Also, victims of title theft and house-stealing can suffer damage to their credit that can take a long time to fix.

Who is at Risk for Home Title Fraud?

Anyone who doesn’t physically and virtually monitor their property can fall victim to home title fraud.

Particularly vulnerable are those who suffer identity theft and seniors taken advantage of by fraudsters. Also, those with second homes, vacation homes, or abandoned homes, foreign real estate investors, and heirs or inheritors of a deceased person’s estate can become victims.

People who don’t practice good cybersecurity measures are also at risk.

“Phishing emails are one way criminals can obtain personal information like social security numbers and passwords from homeowners,” Hollander notes.

Armed with that knowledge, perpetrators can jump into a closing to redirect where funds are wired to or pose as the rightful owner to fraudulently sell the home or use it to qualify for loans.

“Obvious targets of these types of crimes are those less comfortable with technology as well as people outside of the country,” says Liu.

Watch Out for These Red Flags

“There are several warning signs of title fraud,” says real estate attorney Steven J.J. Weisman. “These include receiving a notice for an unpaid water bill, real estate tax bill, or mortgage bill. Receipt of a notice of foreclosure when you always pay on time or don’t even have a mortgage is another red flag. And certainly evidence of activity at an unoccupied home or vacation property is another telltale sign.”

Notice that utility bills are missing? Has your credit score recently taken a hit? These can also be indications of title fraud.

In addition, watch out for property tax or homeowners insurance information in the mail that lists someone other than you.

“And if someone visits your home to advise you they just bought or leased your home, it’s a pretty clear sign you’ve been defrauded,” cautions Charles Gallagher, an attorney with Gallagher & Associates Law Firm, P.A.

Lastly, be on the lookout for any suspicious mail with your home address but lacking your name.

What To Do If You Think You’re A Victim Of Home Title Fraud

If you believe you’ve suffered home title fraud, act quickly. Take the following steps:

The good news is that you may not be held responsible for bills or debts incurred by the criminal, says Weisman.

How To Protect Yourself Against Home Title Fraud

To prevent home title fraud from occurring, follow these best practices: