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Imagine a stranger attempting to steal your home out from under you by transferring the title without your knowledge or consent. Scary, right? Home title theft is a crime, considered a subtype of identity theft. It typically targets properties with significant equity, which puts often-empty vacation homes and long-owned houses belonging to senior citizens at particularly high risk.
Online crime preying on real estate is growing, and it can have devastating consequences. The FBI’s 2021 Internet Crime Report found that in that year alone, over $350 million was lost to real estate–related online criminals. Read on to learn how home title theft happens, what you can do to prevent it and what steps you can take if it has already occurred.
What is home title theft?
Home title theft — sometimes also called title fraud or deed theft — happens when someone steals a homeowner’s personal information and uses it to transfer the home’s title into their own name. They may then try to resell or rent the property, or obtain a home equity line of credit (HELOC) on the property without the true owner’s knowledge.
Title theft victims can be home buyers as well. For example, a buyer might be conned into buying (or renting) a property by someone posing as the legitimate owner, using a fraudulent title. Victims may turn over earnest money or some kind of deposit thinking they have secured a new place to live.
What can happen if a deed or title is stolen?
If someone has stolen the deed or title to your property, they have managed to pose falsely as you and transition ownership of the property to someone who is not you. In the process of doing so, they may borrow against the equity you’ve built in the property (one reason why senior citizens are common victims). And if there is no existing loan on the property, a thief may be able to acquire it even more easily.
Unfortunately, homeowners are sometimes less than vigilant about the bills and tax paperwork coming in each month or year, especially for a property that is not their primary residence. This inattention can allow fraudsters to creep in and change the title before owners even notice any suspicious activity.
In a worst-case scenario, criminals can use a fraudulent home title to turn around and sell the property to unsuspecting buyers without the real owner’s knowledge or consent. This creates multiple victims: the true owner of a property, the buyer and possibly even the bank or lender.
How common is title theft?
Thankfully, despite some scare-tactic media coverage you might have seen, title theft is fairly rare. Scammers are most likely to target a property that meets these three conditions:
- The property is paid off, with no existing mortgage or liens
- The property is vacant and not closely monitored
- The property is owned by someone vulnerable, elderly or otherwise compromised
Even for properties at risk, this crime is difficult to pull off due largely to its complexity. Most localities require witnesses to a title transfer, and even then, more fraudulent documentation would be needed to fool a title company and lender and make it all the way to closing.
How to protect yourself from title theft
Keeping on top of property records, bills and incoming mail can help homeowners reduce their risk of being targeted for this crime. In addition, reviewing your county records and personal credit history routinely can help protect you from identity theft overall. You can get your hands on a free copy of your credit report once each year through AnnualCreditReport.com, and monitor your credit score with any of the three major credit bureaus (Equifax, Experian and TransUnion).
Many standard title insurance policies — a typical cost incurred at closings — also provide a measure of protection against fraudulent activity.
What to do if you’re a victim
If you believe you have become a victim of title fraud, your personal information has likely been compromised. Putting a freeze on your credit is an excellent step toward minimizing further damage.
In addition, be sure to file a report with the Federal Trade Commission’s IdentityTheft.gov site immediately. This government agency can help you both report and recover from identity theft, as well as providing you with an action plan to follow.
While home title theft is certainly scary, ultimately, it is pretty rare. You are unlikely to become the victim of this sort of real estate fraud if you keep close tabs on your bills, property taxes, credit and other personal information.