You have probably heard the television and radio ads warning about how your home can be stolen out from under you by title thieves. Is it true? Can bad guys claim your home equity, and even your home, with title fraud?
Although there is some truth to the scare tactics, the danger is not as bad as they want you to believe and the solutions they are selling are not necessary. Here is what you need to know about how title fraud works and how you can protect your home.
Title thieves search publicly available electronic property records to find a home with built up equity. They often look for homes that are empty, so second homes such as vacation homes can be attractive targets. Once a target has been identified, the thief creates a new identity with supporting documentation such as fake IDs, a Social Security card, etc. They then forge the homeowner’s signature onto a fraudulent bill of sale and transfer ownership of the house to the bad guy.
This is not, as the ads would have you believe, as simple a filling out a single page form, and it is not as common as the companies selling “title lock” services would like you to believe. The FBI has estimated that 9,600 U.S. homeowners have been victims of title fraud. That’s slightly more than 0.0001% of the roughly 87 million U.S. homes owned.
The television and radio commercials you hear are advertising what they call a “title lock” service. The name title lock is somewhat misleading in that your title isn’t actually “locked.” These services simply monitor property records and notify you if anyone attempts to register a change. You can do essentially the same thing by periodically monitoring your property records online. Instead of doing it yourself, many county clerks offer a simple and (often) free service that notifies you if any change is registered to your property records. Contact the office where your property is registered (usually the county clerk’s office) to find out about your options.
Other steps you can take to protect your property include:
- Lock your credit account at each of the three major credit reporting agencies.
- Periodically do a free online search of your county’s deed records.
- Make sure you receive your annual notice of appraised value and tax invoice for property taxes. If you don’t receive them, call the county tax assessor to ask why.
- Call your utility provider if you fail to receive any of your utility bills.
- If you receive correspondence or payment coupons from an unknown mortgage company, immediately contact them for an explanation.
- Check your credit report periodically and make sure everything on it is accurate.
- This is not only for your primary residence. It also applies to vacation or rental property. Make sure you’re getting utility and tax bills and rent payments. If the property is vacant, check on it in person periodically to make sure unauthorized persons aren’t living there.
- When you purchase property, always go through a licensed title company to make sure the title to the property you are purchasing hasn’t been the subject of a previous fraudulent transfer.