What is Property Title Theft?
Title theft is a broad term that covers many of the most common real estate scams including forged deeds or mortgages. The increase in property title theft is believed to be caused by the worldwide rise in identity theft. While property title theft was almost unheard of merely two decades ago, the FBI has identified it as one of the most popular real estate scams in major American cities such as Washington, D.C., New York City, and Philadelphia.
Property title theft is a complex topic that requires many questions and answers to fully understand. Some of the most common and important questions homeowners ask Antonoplos & Associates Washington, D.C. real estate attorneys include: what is title theft, who is susceptible to this scam, ways to ensure this scam does not happen to you, and what to do if property title theft does affect you. Below are answers to each of these questions and more.
What is Title Theft?
Property title theft most commonly occurs when one person fraudulently puts the deed to a house in another person’s name, refinances a home’s mortgage, or takes out a brand new mortgage using a home’s value as collateral. If a thief steals your identity, they can forge a deed or another document making it seem like they are the true property owner. The most prevalent title thefts include:
- The thief can refinance the mortgage, cashing out the equity and walking away with the difference. On top of that, they won’t pay the new mortgage, meaning you’ll face foreclosure.
- They can open a home equity line of credit (HELOC) in your name, taking out the equity on your home and not making the payment.
- If they target an empty home – like unoccupied vacation homes or rental properties – they can use forged deed to sell the home and profit without you knowing.
- They can con seniors or homeowners in crisis with an offer of “refinancing.” The deal is then documented as an actual home sale, transferring ownership to the thief.
What Happens if a Property Title is Stolen?
There is a lot that can happen after someone steals your property title. First, if someone steals the title, you can lose your claim to the property. This outcome could lead to the thief selling your property or refinancing it and not paying the mortgage—allowing the property to enter foreclosure.
Property title theft is a type of identity theft as criminals are using your identity to steal your home. The Federal Trade Commission has published a report of steps to take if you are a victim of title theft. These steps include:
- Call the companies where the fraud occurred
- Place a fraud alert with your creditors and pull your credit reports
- Report identity theft to the FTC
- File a report with your local police department
Taking each of the above steps is vital to minimizing or stopping the property theft.
How Worried Should you be About Your Own Title
According to the FBI, 9,600 victims lost over $56 million in 2017 due to real estate and rental fraud. There are no specific numbers on home title theft, but many see these schemes as a fast-growing area of cybercrime.
While other areas of identity theft are more common than stolen property titles, your home has much more value—and is much more difficult to get back—than a stolen credit card. Not only can a stolen deed leave you homeless, but it can also ruin your credit.
The most likely group of people to experience property title theft is seniors that have significant home equity, are less likely to be tech-savvy, and are more trustworthy. However, another group of people who are at a significant risk of property title theft are those with second or multiple properties. Whether you own a property as a vacation home or investment, these properties typically do not get as much attention as a primary residence. If you own a second or multiple properties, it is vital that you keep impeccable track of bills and notices from your other properties.
How to Protect Yourself from Property Title Fraud
There are many different ways to protect yourself from serious property title theft. Property title thieves look for easy targets. Thus, if you are vigilant, thieves will either avoid you or get caught in the act. The first step to protecting yourself and your home is being aware. However, below are a few more tips to avoid property title theft.
- Keep an Eye Out for Missing Bills: When normal bills start disappearing or changing at random, your deed status could be at risk. If you’ve noticed you never received a bill or an automatic withdrawal never happens, contact the company immediately.
- Monitor Your Credit Report: Regularly looking at your credit report is good practice, regardless of title fraud. You need to be up to date with payments and know there are no fraudulent charges. Monitoring your credit report is an effective way to catch signs of title fraud.
- Make Sure You Have Title Insurance: A title company ensures that the title of the property is free and clear. It protects against any claims or liens made against the property. There are two types of title insurance: lenders and owners.
- Enroll in Title Protection Services: Homeowners can check their title status/land records themselves or sign up for a free county consumer text notification service. Since these services provide already free and available information, many have discounted them as not worth it.
In general, to protect yourself from property title theft, stay up on bills, monitor your credit report, take steps to be insured against title theft, and finally be aware of what criminals are doing to avoid getting conned out of your home.
Contact Our DC Law Office for More Information
Finally, for more information on what is property title theft, contact us at 202-803-5676. You can also directly schedule a consultation with one of our skilled attorneys. Additionally, for general information regarding real estate law, check out our blog.