How to protect your home from title fraud scammers

Imagine opening your mailbox and finding a foreclosure notice for a mortgage you never took out.

This nightmare scenario is becoming all too common as title fraud rises alongside increasing home values. With property prices climbing, scammers are eager to exploit homeowners who might be caught off guard.

But don’t worry – by understanding how these scams work, you can stay one step ahead. With a little awareness and some proactive steps, you can protect your home and keep it safe from title fraud.

What is title fraud?

Title fraud can sound scary but understanding it can help prevent it. Essentially, it's a form of identity theft where someone steals your personal information and uses it to make themselves the legal owner of your home.

These scammers might steal your identity through phishing scams, data breaches or even something as simple as stealing your mail. Armed with your personal details, they can forge documents to transfer the title of your property. This means they could take out loans or mortgages in your name, or even sell your home without you knowing.

But the key to prevention is awareness. Understanding how title fraud works gives you the upper hand. By staying informed and vigilant, you can spot the red flags and take steps to protect your home. Simple actions like monitoring your credit report, securing title insurance and being cautious with your personal information can go a long way in keeping your property safe.

Why title fraud is becoming more common

Title fraud is becoming a growing concern across the United States. With rising home values, fraudsters are increasingly motivated to target property owners. They often start by stealing identities to forge documents that make fake transactions appear legitimate.

Here's how it typically unfolds:

• Stealing identities – Scammers gather personal information to apply for mortgages or loans in your name, leaving you with unexpected debt. They might exploit data breaches or engage in phishing schemes to collect sensitive information.
• Impersonating owners – Some criminals go as far as hiring actors to pose as homeowners during property transfers or as sellers listing homes they don’t own. This can lead to unauthorized sales and significant financial losses.
• Forgery of documents – Fraudsters will go to bold lengths to transfer ownership of a home from one person to another. They’ll forge legal documents such as a quitclaim deed - also called a quick claim deed - to transfer home ownership. While these are useful in certain situations, they are a popular tool of deceit because they often don’t require a title search or title insurance.

What you can do about it

If these criminals succeed, you might lose your property and be left to pay off debts you didn’t incur. It’s a heavy financial burden, but the good news is that you can take steps to protect yourself.

• Get title insurance – This is your first line of defense. Title insurance protects you against losses from title defects or ownership disputes. It’s a one-time cost at closing and is especially recommended for homes that have changed hands multiple times.
• Guard your personal info – Be careful about sharing your personal and financial details. Always verify requests by contacting the company directly using their official website or phone number. Get the phone number from documents they’ve sent you or their website. Scammers have started publishing fake phone numbers for companies in order to trick people into calling the scammers instead of the company they want.
• Keep tabs on transactions – Regularly check your property titles and mortgage documents for unauthorized changes. Keeping an eye on your credit report is another great way to spot suspicious activity early. A credit monitoring service can offer extra peace of mind.
• Watch your property – If your home is vacant, consider installing security cameras. Have a trusted friend or neighbor keep an eye on things and collect or forward mail to prevent identity theft.
• Stay alert to mail changes – Missing bills or receiving strange mortgage paperwork? It could be a sign of fraud. Keep an eye on these potential warning signals.
• Be skeptical of too-good-to-be-true offers – Offers for refinancing or reverse mortgages that seem too good to be true often are. Always do your homework before sharing your personal info.
• Act fast if you suspect fraud – If you think you’ve been targeted, contact your mortgage lender immediately. Report the fraud to the Federal Trade Commission and a credit bureau. Quick action can help reduce the damage.

In today’s real estate market, being informed about title fraud is more important than ever. By understanding how title fraud happens and taking proactive steps, you can protect your home and financial wellbeing. Remember, vigilance is your best defense against these scams. With the right precautions, you can enjoy peace of mind knowing your property is secure.