PROTECTING YOURSELF AGAINST HOME TITLE THEFT
FRAUD THAT HITS CLOSE TO HOME
At a recent meeting, our clients asked us about home title theft and what they can do to prevent it. Home title monitoring companies often air dire warnings of the dangers of home title fraud, the purported rise in occurrences, and the need to protect oneself against it. So, what exactly is home title theft, and what can you do to keep from becoming a victim?
Home title theft, also called deed theft, often begins when thieves choose a house and start gathering the owner’s personal information to steal his or her identity. The Better Business Bureau (BBB) notes that second homes, rentals, and vacant houses, such as those being processed in estates, are more often targeted, along with the homes of older owners who are more likely to have equity in the property. Using forged documents, they file a transfer of property ownership (title) to themselves with the county clerk of courts, then sell the house or borrow against the equity. They take off with the cash and leave a mess behind them.
One big concern is that owners are not always aware of the fraud until long after it has happened. Owners aren’t likely to know until the lender starts foreclosing on the mortgage taken out by the thief or even after foreclosure. According to real estate litigator William Maffucci when interviewed by Smart Business, the good news is that owners aren’t responsible for paying off the fraud, though some owners are inclined to do so. However, because many victims end up having to file a lawsuit to get the title cleared and might even have to relocate during the fiasco, cleaning up a fraud this substantial can be prohibitively expensive, time-consuming, and stressful. There are even horror stories (as told by the monitoring services, of course) of people losing their homes and other valuables because of it.
Unfortunately, there is no guaranteed way to keep home title theft from happening to you, even if you’re actively living in the house. But there are some preventive and monitoring steps you can take to avoid becoming an easy target and keep the situation from escalating. Many of them are easy, effective, and cost no more than your time.
DON’T SHARE SENSITIVE MATERIAL WITH VENDORS/ENTITIES YOU DON’T TRUST.
This goes without saying, but identity thieves can sometimes find a wealth of information just by using what you readily provide on, say, your social media. Not only do platforms like Facebook and Twitter give users the option of posting their birthdate on their profile to receive birthday wishes, but people might post that they’re traveling to their second home in Florida or they’re going on a two-month cruise through the Mediterranean. That’s a potential opportunity for a fraudster—or a plain old burglar, for that matter. Of course, you won’t be able to avoid sharing sensitive material with certain vendors, but do your due diligence to ensure that cybersecurity and other protective protocols are in place.
SHRED ANY SENSITIVE MATERIAL.
Make sure your personal, physical documents aren’t floating around. That includes anything with personally identifiable information (PII) such as social security numbers, birthdays, account numbers, driver’s license numbers, your full name, phone numbers, email addresses, old credit cards, etc. The point is to make it as difficult as possible to recreate and exploit your identity.
SUPERVISE ACTIVITY AT SECOND/VACATION/INVESTMENT HOMES.
Unoccupied or little-used homes seem to be a more likely target for home title theft because thieves can take action without worrying as much about owner awareness. For example, if they know no one has been by to check on the house for some time, some thieves might go as far as putting a “For Sale” sign in the front yard when they’re trying to sell the house! If you’re not able to watch over your home yourself, ask someone trustworthy to check frequently for any suspicious activity, collect the mail, and demonstrate that someone is keeping an eye on the property.
VISIT YOUR LOCAL PROPERTY APPRAISER’S WEBSITE TO REVIEW THE TITLE OF YOUR PROPERTY(IES).
The internet isn’t all bad, and public information like property ownership is available online. Many county property appraisers, such as the Sarasota County Property Appraiser and the Manatee County Property Appraiser, provide an online, easily searchable resource. Periodically look up your home to ensure the title is still in your name and has no illegitimate liens on it. You can also search your name to make sure you’re not showing up as the owner of a property you don’t remember purchasing or inheriting.
MONITOR YOUR CREDIT REPORTS.
Home title theft is a form of identity theft, so take action to monitor your personal data. You are entitled to receive your credit reports from the three major credit bureaus (Experian, TransUnion, and Equifax) once a year for free, and now, because of COVID-19, free weekly, online credit reports are being offered through April 2021. You’ll be able to see illegitimate lines of credit, mortgages, or inquiries. Reviewing your credit report does not impact your credit score and it gives you a chance to watch for fraudulent activity and start taking action.
MONITOR YOUR FINANCIAL ACCOUNTS FREQUENTLY.
Check for any unusual or suspicious activity, such as withdrawals or transfers, in your bank accounts and brokerage accounts and on your credit cards. According to the BBB, scammers might change the address associated with your accounts, so take note if expected bills never arrive.
CONSIDER HIRING A MONITORING SERVICE.
Some home title monitoring services can be contracted for under $200 a year, while some are bundled with general identity theft monitoring for a higher price. It is important to note that these services won’t stop a theft or pay for legal fees or other extenuating expenses in the case of home title fraud. However, they can alert you if something suspicious arises and save you the time of having to search for fraud yourself. That being said, if you plan to follow the steps above to monitor your accounts and data, you can accomplish just about the same things monitoring companies do.
Quick Tip: Don’t depend on owner’s title insurance to protect you from home title theft. Most such policies only cover cases in which someone sues you while asserting a claim against the home before you bought it.
DO YOU SUSPECT YOU’RE A VICTIM OF FRAUD?
No matter the type of fraud, contact your lender and other financial institutions and have a fraud alert placed on your credit reports. Be sure to review your accounts and credit report to begin the process of removing illegitimate charges and records. The Federal Trade Commission (FTC) also recommends creating an FTC Identity Theft Report, which can assist you in proving to companies that your identity was stolen and make the process of setting everything back to rights easier. You might also want to file a police report. Because you may not know from where the breach originated, consider changing your passwords and PINs on your online logins.
BE VIGILANT, NOT FEARFUL
Nefarious as the action is and scary as it sounds, home title theft does not seem to be terribly common—even rare. While the FBI won’t divulge the number of cases of such fraud specifically, it’s believed that it isn’t widespread. Nonetheless, it is worth it to monitor your accounts, credit reports, and properties on a regular basis, both for home title theft and other types of fraud. Whether that means periodically reviewing everything yourself or hiring a service to do it for you, it’s prudent to take proactive steps to protect yourself and one of your largest assets.
Sincerely,
Natalie Brown, CFP®
Director of Client Services
Day Hagan Private Wealth
—Written 10.22.2020.
Print PDF Copy of the Article: Day Hagan Private Wealth Insights: Protecting Yourself Against Home Title Theft (PDF)
SOURCES:
Better Business Bureau–Home Title Fraud: https://www.bbb.org/article/news-releases/22679-bbb-alert-home-title-fraud
FBI–House Stealing: https://archives.fbi.gov/archives/news/stories/2008/march/housestealing_032508
Money Rates–What Is Home Title Fraud: https://www.money-rates.com/mortgage/what-is-home-title-fraud.htm
Smart Business–The Myth of Title Theft: https://www.sbnonline.com/article/the-myth-of-title-theft-what-providers-of-protection-against-it-arent-telling-you/
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