It’s 2022 and the threat of home title theft has not gone away. Criminals are still targeting vulnerable homeowners and forging title documents for profit.
In fact, the numbers seem to be rising. According to CoreLogic, mortgage fraud increased by a concerning 37.2% year-over-year in the second quarter of 2021.
In this article, we’ll help you understand what home title theft is, shed light on what criminals are really after, and share a handful of specific steps you can take to avoid becoming a victim this year.
What is Home Title Theft?
You can find a lot of different definitions of home title theft, but here’s how we’ve described it in previous articles:
Home title theft is also known as home title fraud, property fraud, deed fraud. Title theft occurs when someone fraudulently changes the name on your title from you to them for the purpose of using your home’s equity. Once they have access to your home title, a criminal can take out loans using your equity as collateral, pocket the money, and disappear.
What Are Criminals After?
A common misconception about home title theft is that criminals are trying to steal your physical property, but this is not the case.
In reality, a criminal is not interested in obtaining your actual house. Instead, what they’re actually after is your home equity. They want to be able to use your home equity as collateral when obtaining fraudulent loans, and the way they do it is by forging home title documents.
Because the goal of a home title criminal is to leverage home equity and not the physical property itself, the following groups are particularly vulnerable:
Vulnerable Group #1: 100% Equity Homeowners
People who have completely paid off their home mortgages are more at risk of being targeted by a criminal because they have more equity that can be leveraged to get fraudulent loans.
In one case from 2013, a criminal targeted homeowners with high amounts of equity and “attempted to steal more than $38 million and caused approximately $13 million in losses.”
According to the Justice.gov press release about the case, the criminals reportedly, “used fee-based web databases to search for potential victim account holders with large balances in home equity line of credit (HELOC) accounts.”
It’s important to note that criminals aren’t only interested in 100% equity homes—they will also target homes with a high amount of equity.
Vulnerable Group #2: Older Homeowners
Another vulnerable group that criminals target is older homeowners. The reason why older homeowners are ideal targets for home title fraud criminals is because they are less likely to be attuned to what’s happening or changing with their financial accounts.
They are also more likely to fall for phishing scams and other crimes that give criminals access to personal information like social security numbers, account numbers, pin numbers, passwords, and security answers.
This group may also be targeted because they are less likely to report crimes after they happen.
As the FBI explains in a web page about elder fraud, “seniors may be less inclined to report fraud because they don’t know how, or they may be too ashamed at having been scammed. They might also be concerned that their relatives will lose confidence in their abilities to manage their own financial affairs. And when an elderly victim does report a crime, they may be unable to supply detailed information to investigators.”
Vulnerable Group #3: Multiple Property Homeowners
The third group of people who are vulnerable to home title fraud crimes is those who own or manage multiple properties. Examples would include rental properties, vacation homes, investment properties, fixer-uppers, and second homes.
This type of property can be more attractive to criminals because they know homeowners are paying less attention than they would be if they physically lived in the home themselves.
Unless you have mail for these properties forwarded to your primary residence, you may not see the signs of home title fraud until the damage has been done.
Steps You Can Take to Prevent Title Theft
If you or someone you know falls into one of the vulnerable groups we outlined above, you may be wondering what you can do to avoid becoming a criminal’s next victim.
While 100% prevention is never a guarantee, there are a handful of steps you can take to reduce your chances of becoming a victim and having to deal with the headaches that come after a criminal has taken out a loan using your home equity.
Step 1: Pay Close Attention to Your Mail
One of the most important steps to take is to make a habit of closely monitoring your mail. You want to look for account notice updates, letters from loan companies you don’t recognize, and loan default notices. If you see any of these types of communications come through the mail, it may be a sign that a criminal is attempting to take out a loan using the equity in your home. Catching them early enough in the process may prevent them from benefiting financially from your home equity.
Step 2: Actively Monitor Credit Reports
Another simple way to protect yourself from home title fraud criminals is to pay attention to your credit reports. If you see inquiries you don’t recognize, or any incorrect information, spend time trying to understand what it is.
If you find major discrepancies or inquiries that look concerning, take steps to freeze your credit and lock down your financial accounts.
Step 3: Keep Information Private and Protected
Never share personal information with anyone you don’t know. In general, your financial institution should not ask for your full social security number over the phone or via SMS text.
Take time to update the operating system of your personal computer to keep the security of your files and personal information intact.
Step 4: Recognize the Early Warning Signs
There are a handful of warning signs that may point to an attempt by a criminal to forge a home title and use your home equity. We mentioned a few in step one, and you can find more in this article from our blog.
The biggest warning sign to watch for is legitimate mail from lenders or financial institutions that you do not recognize.
Step 5: Monitor Your Home Title Records
A final step you can take to prevent criminals from taking out loans using your home equity is to monitor your home title records.
Your home title records are maintained by the county. There are two ways to monitor these documents on an ongoing basis:
Option #1: You can manually visit county records offices and ensure that the documentation they have on file is correct and has not been modified by anyone.
Option #2: You can automatically monitor your home title records using a monitoring and protection service like Home Title Lock, which keeps track of changes being made to your documents and notifies you in real-time when changes are made. This allows you to act quickly before a criminal has the chance to take out fraudulent loans using the equity attached to your property.
Final Thoughts
You’ve worked hard to earn the equity you have in your home. Don’t let criminals benefit from your hard work. Take the necessary steps to protect yourself, especially if you fall within one of the three vulnerable groups mentioned above.
