The typical homeowner usually sees their house as one of their most significant investments. Unfortunately, your home’s value also draws the attention of thieves looking to scam you for your equity. Homeowners who experience identity theft are especially vulnerable to home title theft, as their financial information is in criminals’ hands. Here’s how you can avoid home title theft or report it if you suspect a thief is using your financial information.
What Is Home Title Theft?
Home title theft is when someone illegally steals your identity and transfers your house title to their name to steal money or property. Identity theft is usually necessary for title fraud because the thief needs to make the forged home deed look legitimate. Home title theft comes in several forms, including:
A fraudulent refinance in which the person withdraws your equity and leaves you with another mortgage. While they don’t gain possession of your home, they use your identity to steal money based on your home’s value.
Similarly, they can access your equity through a home equity line of credit (HELOC) and create a mountain of debt for which you’re responsible.
Thieves can forge deeds to sell uninhabited real estate, such as rental buildings or vacation homes.
Someone might present homeowners in financial hardship with a fake refinancing opportunity. At closing, the homeowner unknowingly signs paperwork for a home sale assigning the scammer as the new owner.
How To Prevent Home Title Theft
Home title theft can have dire consequences – but fortunately, homeowners can take several measures to protect themselves.
1. Keep Track Of All Bills And Homeowner Mail
Staying on top of the consistent flow of typical bills, such as utilities and mortgage payment notices, is crucial for homeowners to stay in good financial standing. If specific bills stop arriving or you receive mortgage paperwork that seems unfamiliar, it may be a sign that someone could be tampering with your home title. Therefore, keeping track of your homeowner mail is vital to preventing theft and fraud.
2. Check Your Credit Report Routinely
Frequently checking your credit report is an excellent practice for financial health. In addition, homeowners can scan their reports for suspicious activity. For example, a new loan or lender you don’t recognize requires further investigation, as it could be a sign of a scam. You can also pay for a monitoring service to provide constant vigilance for your credit reports.
3. Get Title Insurance
Title insurance comes in two forms: lenders and homeowners. When you buy a home, your lender will mandate your purchase of title insurance to ensure there are no liens against the home you’re buying. In other words, the insurance helps guarantee the sale is legitimate and provides repayment to the lender if it isn’t.
Conversely, homeowners title insurance protects you after buying a home. If unforeseen liens or financial claims come against your home, your policy will pay for legal fees and defend your right to stay in your home. This protection includes fending off fraudulent claims against your homeownership.
4. Stay Educated On Common Scams
Understanding and identifying common scams that target homeowners can help you steer clear of theft. For example, scammers pose as real estate agents or lenders to perform fraudulent transactions or identity theft. Or, the thief might try a reverse mortgage scam on older homeowners, leaving them saddled with debt. Lastly, if a deal or interest rate for a home seems too good to be true, it likely is. Scammers often lure in unsuspecting homeowners with incredible deals to obtain personal and financial information.
What To Do If Home Title Theft Has Happened To You
Homeowners who are victims of home title theft or detect suspicious activity should take the following steps:
Call or contact the relevant entities. For instance, call your lender’s fraud department if you think scammers have used your identity to steal money through a refinance. Your lender will freeze your account to prevent further activity.
Change your login credentials for your mortgage, credit cards, bank accounts and other financial accounts. It’s also essential to file an identity theft claim with the Federal Trade Commission (FTC).
Notify one of the three credit bureaus (Equifax®, TransUnion® and Experian™) of the theft. The entity you contact will inform the others. In addition, pull your credit reports from the bureaus to document the theft.
Visit your local police department with your ID, proof of address and documents demonstrating the home title theft and your FTC identity theft claim.
The Bottom Line
Home title theft can be financially ruinous for homeowners. When a thief gets a hold of your personal and financial information, they can take out new debts against your home and walk away with the cash or even transfer your property to themselves. Therefore, monitoring your financial information and reporting suspicious activity to your lender and relevant authorities is crucial.
Contact your Clerk of Court:
Clerk of Court
Free property fraud protection program provided by parish Clerk of Court’s office