When you think of theft, you probably think of someone stealing your wallet, your phone or maybe even your car. The idea of home theft may never have occurred to you – after all, how could anyone walk away with your home in their back pocket?
Home theft can happen, though. It happens when a thief forges your signature and/or steals your identity, stealthily taking over the deed to your home.
The good news is that you can protect yourself from this type of insidious fraud and theft. Keep reading to learn more about home title theft and how you can prevent it from happening to you.
What Is Home Title Theft?
The title to a home is a shorthand way of referring to its legal ownership and all the rights that go along with it. When you buy a home, the home’s ownership and title pass to you. In many cases, the title is jointly owned, as when spouses purchase a home together and have both their names on the deed.
Even if you’ve taken out a mortgage to buy the home, the ownership rests with you, not with the mortgage company (unlike when you buy a car, when the lender is likely to hold on to the car’s technical ownership until you finish paying for it).
Home title theft is a type of identity theft in which a thief fraudulently puts a deed (the document stating that you own the home) in their own name. The thief creates false documents to establish the fraudulent identity, often including Social Security, driver’s license and other ID documents.
They then use that false identity to transfer the home’s title to themselves or another person. Once a home title thief has illegally transferred the title, the new owner can then sell the home, or raid the available equity, all without the owner being aware of it.
Chain of title refers to a home or property’s ownership history. A title search confirms the chain of title, showing how the property passed from one owner to another.
What Happens if a Property Title Is Stolen?
If a home title thief transfers the deed of your home into their name, they can do whatever they want with the property. They might take out a home equity loan and fail to make payments on it.
They could refinance the property and turn all your equity into cash – then run off with the cash. They could even sell the home without you being aware of it.
Who is likely to be targeted by home title fraud?
Home title thieves can target anyone, but they often target vacant homes, vacation homes and rental property where the owner isn’t on-site all year round.
They also target homes owned by older adults, who may be especially susceptible to fraud. Often, these thieves offer to refinance an older person’s home, with the homeowner unaware that they’re actually signing away the ownership of their home.
What are the signs of home title fraud?
Many people don’t learn the title to their home has been stolen until they receive a foreclosure notice from their mortgage company. Other signs that may indicate you’ve been a victim of home title theft include:
- A new lender starts sending you mortgage information
- It looks like someone is living at a vacation property or a vacant home
- You learn loans have been taken out in your name
- Bills you regularly receive stop arriving in the mail at your home
- Your utility bills at a vacation property or vacant home suddenly change or skyrocket
- Tenants stop paying their rent
Because home title theft is a type of identity theft, you may see other signs of identity theft as well.
These can include unexplained withdrawals from your bank accounts, bills (including medical bills) for purchases you haven’t made, collection notices for purchases you never made and new credit cards you didn’t apply for.
What happens if I try to sell my home after a home title theft?
When you purchase a home, you typically agree to a title search, which the title company usually conducts. This title search confirms that the home seller has the right to sell the home and ownership can pass to the home buyer cleanly.
If a home thief has stolen the title, the title search will reveal the theft, making it extremely difficult to sell the home.
If you’ve wondered why you’re required to buy title insurance when you buy a home, here’s your answer. Title insurance protects against home title theft and other problems with the chain of title.
How To Protect Yourself From Home Title Fraud
Your first defense against home title theft is to stay vigilant. Thieves typically look for people who send signals that they can be taken advantage of – and if you keep your eyes open, you make yourself and your property a less tempting target.
You can take proactive steps to guard yourself against title theft and other types of identity theft. Put these steps into practice to keep yourself safe:
- Check your home title: Your county registrar’s office holds on to property ownership records and you should be able to check those records online for free. Some counties offer a notification service that lets you know whenever a change is recorded regarding your property.
- Tighten up your online security: Home title theft typically occurs in the digital world. If you’re being less than conscientious with your computer and mobile device passwords, you could be putting yourself at risk. Use secure passwords, don’t share password-related information on social media (like your birthday) and make it hard to get to your online financial records.
- Monitor your credit reports: Keeping an eye on your credit report will catch all types of identity theft, not just home title theft. Check out the free copies of your credit report from all three reporting agencies (Experian™, Equifax® and TransUnion®). You may also want to subscribe to a credit monitoring service.
- Buy title insurance: Your mortgage lender may already have required you to purchase title insurance. If not, buy a policy for your own protection. Title insurance protects you when problems in the chain of title are discovered after you purchase your home.
- Pay attention if you start missing bills: When bills go missing, you could be dealing with a small error – or you could be witnessing identity theft in action. Follow up with your bank and your creditors immediately.
- Investigate if you receive new bills: Unexpected bills for services you don’t recognize are another sign of potential identity theft. Pay special attention to bills for services related to your home, such as utility bills.
- Consider enrolling with a title protection service: Some people find they get extra peace of mind from a title lock or title protection service that monitors changes to the public documents related to your home. Make sure you’re dealing with a reputable service, as some scammers have moved into the title protection space.
Keeping an Eagle Eye on Finances Can Protect You From Thieves
Staying vigilant is the best protection you can provide against home title thieves who may be looking for the opportunity to steal your identity – and your property.
Whether you keep an eye on your credit report and home title or pay for a monitoring service, being aware of what’s happening with your finances is key to avoiding home title theft.