Home title fraud is a growing threat affecting homeowners across the U.S.
From 2015 to 2019, real estate and rental fraud grew at 2.6x the rate of credit card fraud— and reported real estate losses are now 2x as much as credit card fraud.
According to the FBI, it’s one of the fastest-growing white-collar crimes in America, accounting for twenty percent of all fraud.
But what exactly is home title fraud and how does it happen? Who is most at risk and what can you do to protect yourself from this new breed of cybercriminals?
In this guide, we’ll give you everything you need to know about home title fraud so you can protect yourself and your family against a complex, costly crime that could change your life forever.
What is Home Title Fraud?
Home title fraud happens when someone steals the title or deed of your home for the purpose of financial gain.
Title fraud is also known as house stealing, property fraud, & deed fraud. Title fraud occurs when someone fraudulently changes the name on your title from you to them, effectively stealing your home. Then, the criminals take out loans using your home as collateral, pocket the money, and disappear.
As you can imagine, this type of crime can be devastating for homeowners, especially those who have 100% equity in their homes.
When home title fraud occurs, victims are left to pick up the pieces and must enter into an expensive and time-intensive legal process to reclaim their title and dissociate themselves from the debt that has been attached to their property.
How Does Home Title Fraud Happen?
One of the reasons why home title fraud has increased in recent years is because of how easy it is for criminals—or anyone—to access homeowner information online.
If you own a home, your title and mortgage information is stored online and available for anyone to see.
Here’s how home title fraud happens:
Step 1:The criminal gets your information by downloading your title from your county's website. They have instant access to your home equity, your primary contact information, and even examples of your signature.
Step 2:The criminal forges their name or a fictitious name on the title, uses a fake notary stamp, and refile it with the county to claim ownership of your home. They spend a small fee of $10 to file the paperwork with your forged signature attached.
Step 3:The criminal profits on the home by taking out loans, refinancing, selling with a quitclaim deed, or by legally inheriting the property after the original owner’s death.
As a homeowner, you will be unaware of the changes that have been made to your title and ownership until one of the following happens:
- You receive a letter from a lender informing you of a foreclosure on the property.
- You go to refinance or sell the property and find that you are unable to do so because you are no longer listed as the owner.
- You discover someone else is living at a rental or investment property that you rarely visit in person.
At this point in time, the only way to deal with the problem is to spend thousands—if not hundreds of thousands—of dollars and countless hours in court trying to unwind the damage that has been done.
Who is Most At Risk of Home Title Fraud?
If you’ve made it this far, you might be thinking to yourselves, “this sounds scary, but am I actually at risk?”
The simple answer is yes—if you have a home or multiple homes and have any equity in those homes, you are at risk of home title fraud.
Home title fraud criminals will target the following types of homeowners:
1. All homeowners.Anyone who owns a home is at risk of losing their title to criminals. This is because title information is publicly available for criminals to find and alter. All they need to do is forge a few documents and pay a small fee for ownership to be transferred to them.
2. Homeowners with high equity. It’s estimated that 34% of American homeowners have 100% equity in their property, making them an attractive target for home title fraud. Criminals specifically target homes that are 100% paid off or ones that they know have high equity. These types of homes offer bigger payouts for them. They can take out bigger loans against the equity of the house.
3. Seniors and aging parents. Criminals target seniors because they usually have a lot of equity built up in their homes and they are less adept at preventing online identity theft. They also might be less aware of the typical signs of fraud that other homeowners would recognize sooner.
4. Second home or investment property owners.Criminals look for homes that are vacant, like second homes or rental properties. The owners of these homes are not typically paying as close attention to them as their main property where they live, making them prime targets for fraud.
Homeowners in each of these categories are falling victim to home title fraud, and the prevalence of this crime is only increasing each year.
How Prevalent is Home Title Fraud?
As mentioned, the FBI now considered home title fraud and mortgage fraud to be the fastest-growing white-collar crime in America.
The ease at which criminals can access property information, forge documents, and claim ownership of homes without detection makes it an attractive crime.
The FBI reported losses totaling more than $5 billion in 2015 as a result of title and mortgage fraud.
CoreLogic also reported a 12.4 percent YoY increase in mortgage fraud risk for the 2nd Quarter of 2018.
To hear real stories of victims who have experienced home title fraud in recent years, visit this page.
Potential Consequences of Home Title Fraud
If you fall victim to home title fraud, there can often be grave and expensive consequences.
The main reason why is because no one else is offering you protection.
Despite what you may believe or have been told, title fraud is not covered by your bank, your legal trust, your homeowner’s insurance, or the identity theft protection service you pay for. It’s also not covered by the title insurance you had when you purchased your home.
It’s also unlikely that you will be notified of any potential changes to your title until it’s too late. Your county records office is under no obligation to alert you of any changes being made to your title—they are simply responsible for maintaining public records.
There are many consequences of home title fraud. Here are a few of the big ones:
1. Loans get taken out against your property and you become responsible for the debt.
2. You lose the forever home that you worked your entire life to pay off.
3. You lose all the equity you had built up in your home that you intended to access when you retire.
4. You spend thousands of dollars and hours in court trying to untangle the mess you’ve been left with.
5. Your ability to take out loans or buy another home in the future is jeopardized.
6. The extreme stress of having to go through the complex process of reclaiming your title impacts your physical and emotional well-being.
Home Title Fraud Common Signs and What to Do if You Become a Victim
There are a few common signs to look for when trying to determine if you’ve become the victim of a home title fraud criminal:
Sign #1:You receive foreclosure letters or letters from a lender you don’t recognize.
Sign #2: You find out you’ve defaulted on a loan you never took out.
Sign #3:You stop receiving any mail or notices from your actual lender.
Sign #4:You discover tenants of your rental property are paying rent to someone else.
Sign #5:You discover someone else living in your second home or rental property.
Sign #6:You find that you are unable to refinance, transfer ownership, or sell your home.
Sign #7:You see someone else’s name on property tax documents.
If you observe any of these signs and believe someone has stolen your home title or profited financially off your property, take the following immediate actions:
Step 1:Report the fraudulent activity to the FTC using this form.
Step 2: Call the companies where the fraud occurred. Freeze funds if possible.
Step 3:Place a fraud alert on your credit reports.
Step 4: File a police report and notify your county records office.
Step 5: Contact an attorney who can help you reobtain your home title and stop debt collectors from collecting the debt they believe you are responsible for.
If a criminal truly has stolen your home title and taken loans out against your property, you’re in for a long, often emotionally draining process—the best thing to do is take it one step at a time.
How to Protect Yourself From Home Title Fraud
If you want to be more proactive when it comes to preventing home title fraud, consider taking some or all of the following steps:
Step 1: Monitor your credit report. Look for any discrepancies or unexplained changes that could point to fraudulent activity.
Step 2: Pay attention to your mail. Make sure you are still receiving mail from your current lenders and look for mail from lenders you don’t recognize.
Step 3: Manually monitor your home title documents. Access county public records and look for any changes that have been made without your knowledge.
Step 4: Physically visit your investment properties. Make sure no one unexpected has taken up residence in your home.
Step 5: Enroll in protection services. Use a service like Home Title Lock to automatically monitor changes to your home title.
Get Immediate Protection with Home Title Lock
The best way to protect yourself against home title fraud is to enroll in a service that offers real-time home title protection.
At Home Title Lock, we provide these key services to our customers:
1. Real-time monitoring and alerts:We monitor your home title 24/7/365 and notify you anytime any changes have been made.
2. Advising in the event of fraud: Our team of experts helps you navigate through the process of dealing with a case of fraud.
3. Comprehensive title report: We provide a free title history report when you become a customer, which allows you to see past activity on your property and learn if you’re already a victim of title fraud.
Learn more and sign up here to become a member and start receiving instant home title alerts and protection.