If this were to happen, and the perpetrator was able to take out a loan and receive cash using the property as collateral, the rightful owner would be under no obligation to repay the loan. Title transfer requires multiple verifications, and the perpetrator must successfully execute false identification, forgeries, notary fraud, involve straw buyers, and so on. If you have aging parents, multiple and/or vacant properties, or a large amount of equity in the property, the risk is higher, but we believe still quite low due to the fact that all fifty states and the District of Columbia require multiple documents to transfer ownership of real estate which prevent this from happening.

Elderly property owners are more vulnerable as monitoring this may be too difficult for them.

When properties are vacant and not monitored it is easier to forge a deed and transfer the property illegally.

If you have a loan on your property, the chance of this happening is near zero. If there is an incumbent lender when a scammer tries to retitle the property, the lender is on the deed and will need to approve any transfer of title and the existing loan will have to be paid off. When there is not a mortgage on the property.When we drill down it is clear that the instances of home title fraud are very low and usually occur in very specific situations: Sounds scary, but these statistics include all different types of real estate, rental, and timeshare crimes, with only a small fraction of cases involving home title fraud. In just two years, this number grew to almost 12,000 victims with losses totaling over $220 million. In 2017, the FBI reported over 9,600 real estate and rental fraud victims with losses totaling over $56 million. Home title insurance purchased at the property closing only protects from irregularities that occur before the date of purchase but does nothing for events that occur afterward. Home title fraud would more aptly be called deed fraud as it seeks to change the home’s title on the deed. It contains a detailed description of the property and is signed by the seller who conveys the title to the buyer who also must sign. The deed is the physical document that conveys the title to the new owner when a home is sold.

When you have title to a piece of real estate you have rights associated with the property: Home title fraud occurs when a scammer changes ownership of your home to another name by forging your name on a deed, filing it in the records room of your county courthouse, then takes out a loan using the home as collateral.Ī title denotes who has legal ownership of a home. This can be a confusing issue and, as with many financial subjects, there is a lot of noise and hype, so here is our take. This is no doubt due to the non-stop ads warning about this very scary threat. Many clients have asked us about title “insurance” or “locks” that claim to prevent losses and wonder if they should be protecting themselves from home title fraud.

Home title lock