Patricia Mertz Esswein
Have you seen scary ads for deed theft or home title fraud protection? They often claim that this type of crime, in which thieves transfer a home title to themselves, is soaring. But there's no clear evidence that this is true. Nor is there a good reason to shell out for a service that protects your home's title since you can do much or all of this monitoring on your own for free. Unlike the attempted deed theft of Graceland, tampering with your property won't garner FBI or national attention.
Deed theft is a real issue. Is it a growing problem? That’s hard to determine; the FBI collects broad data on real estate fraud without reporting specifically on the type of fraud. Real estate fraud can encompass more than title forgery, such as when borrowers misstate their ability to purchase a property or renters are cheated out of a security deposit. What's clear, though, is that this general category of real estate fraud is on the rise.
According to the FBI’s 2022 Internet Crime Report, 11,727 individuals in the US were victims of real estate fraud. This is a tiny percentage of the roughly 87 million homes owned in the US (and remember that some of those scams may have targeted renters). Still, the numbers show an increase in real estate fraud overall, with losses totaling $400 million in 2022, up from $350 million in 2021.
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What is deed theft?
Deed fraud is a type of identity theft. A criminal identifies a potential home to target — often a second home, rental, vacation home or vacant house — and then forges the true owner’s signature on the deed as they “sell” it to themselves or a third party such as a trust.
When they register the sale at the county recorder’s office, they’ll use personal information gleaned from the internet or elsewhere to assume your identity or claim to represent you. They will employ fraudulent identification, a counterfeit notary signature, or even work with an unethical registered notary to pull off the scam. After taking ownership of the property, they’re free to do whatever they want — even sell it to a legitimate buyer.
What can a criminal do with your deed/home title?
Thieves can do almost anything with your home after the acquire title. Everyone's worst nightmare is when they sell the home or borrow against it, stealing your equity. When they fail to make payments on a loan secured by your property, you could end up in foreclosure or be unable to sell, refinance or pass the home on to your heirs.
Criminals can make money from a forged deed in several ways:
- Illegally renting out the property.
- Opening a home equity line of credit (HELOC).
- Refinancing the mortgage to cash out the equity.
- Sell the home to a legitimate buyer and pocket the profit. This is a common approach for unoccupied vacation homes or rental properties.
How to protect property from deed theft
Homeowners should make sure the appropriate authorities have your correct mailing address for you or the person who should receive notices about your property. If you go away for extended period of time, have mail forwarded or ask someone you trust to pick up mail and visit your home. Periodically visit any vacant house to ensure that no one has taken up residence illegally.
Look for deeds that you or your attorney didn’t prepare or sign, or loans you didn’t take out, as well as liens of contractors, subcontractors, real estate brokers or attorneys whose services you didn’t hire.
Criminals often target vacant properties — such as vacation homes — especially if the legal owner is deceased. Older people are also common targets because they often have more equity in their homes, and they might not be tech-savvy or aware of the dangers online.
Here are four steps you can take to prevent deed fraud:
- Pay attention to incoming bills. Keep a close eye out for mortgage, tax and water bills. Sometimes, thieves change the address on bills to hide their crime, giving them more time to profit from the property. If you’re looking out for older family members, make a note of when they receive bills each month and check to make sure the bills continue arriving
- Check the status of your property deed. Anyone can check local registries or the county recorder’s office for land records and property deeds online in the United States. Try to check your deed's status regularly to ensure no one is trying to take over your ownership rights. Or better yet, if possible, set up notifications at the registry to alert you to any changes
- Monitor your credit reports for signs of identity theft. Most people only look at their credit reports when they’re applying for a mortgage or loan. However, if you want to avoid becoming the victim of deed fraud, you should be more vigilant. The three major credit bureaus — Equifax, Experian and TransUnion — offer a free credit report to consumers each week at AnnualCreditReport.com.
- Check if you have a title insurance policy or buy one when refinancing. When you buy a house or refinance, you can purchase enhanced title insurance through the American Land Title Association (ALTA). Their Homeowner's Policy ensures against impersonation or forgery. Ask your title company for help with pricing and signing up.
- You could pay for a monitoring service, but why would you? Several companies offer monitoring services, including Home Title Lock, which says it will monitor your home’s deed 24/7 to prevent title fraud. The service costs $19.95 monthly ($199 annually, four years for $796). But you can protect yourself — for free — by periodically checking your property record on the website of your county’s register of deeds.
5 signs you’re the victim of deed theft
There are indicators that fraud may have occurred that you can monitor. Acting fast is crucial if you think you've fallen victim to any fraud. Take action as soon as you notice something suspicious before criminals can do too much damage.
Look for these warning signs:
- You stop receiving your water bill or property tax assessment or bill.
- Utility bills on a vacant property rise suddenly, or you find people living there.
- You stop receiving your tenants’ rent payments and learn that they’ve been making the payments to another person and location.
- You receive payment books or other information from a lender with whom you haven’t done business.
- You find yourself in default on a loan or notified of foreclosure proceedings.
Municipal resources
Many counties now provide a consumer notification service. Register for free, and you’ll quickly receive an e-mail or text any time a document is recorded on your property. Currently, there is no central database to direct you to state or county notification services. Invest the time and explore your local registrar's website and see what services they provide. If they don't have an online database, take a trip to your county registrar's office to physically examine the title to your property.
If you experience or find something amiss, notify the register of deeds and local law enforcement. Homeowners who think they are victims of deed fraud are urged to act quickly to report fraud to your local sheriff, get a certified copy of the fraudulent document from the register’s office, report the crime to the district attorney’s office in the jurisdiction where the property is located, and consult an attorney to help confirm ownership of the property. (Legal action known as “quieting the title” may be required to resolve any questions about your ownership of the property.)
Bottom line
It’s wise to monitor your property proactively and pay even closer attention to the assets that current scams may target. While there are services you can subscribe to that will monitor your title, these companies don't prevent title theft. You can conduct a home title search by yourself. You can do this by visiting the county clerk’s office where your property is located to confirm the necessary facts about the property.
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