Home Title Theft: How To Protect Yourself

Imagine a stranger trying to take your home away from you by transferring the title without your knowledge or consent. Creepy, right? Property theft is a crime considered a subtype of identity theft. It typically targets properties with high equity, which often puts vacant vacation rentals and long-established senior homes at particularly high risk.

Online crime spying on real estate is on the rise and can have devastating consequences. The FBI’s 2021 Internet Crime Report found that over $350 million was lost to real estate-related online criminals this year alone. Read on to learn how home title theft happens, what you can do to prevent it, and what steps you can take if it’s already happened.

What is home title theft?

Home title theft — sometimes called title fraud or deed theft — occurs when someone steals a homeowner’s personal information and uses it to transfer the title of the home into their own name. They can then attempt to resell or rent the property without the true owner’s knowledge, or obtain a home equity line of credit (HELOC) on the property.

Home buyers can also be victims of title theft. For example, a buyer could be tricked into buying (or renting) a property by impersonating the rightful owner and using a fraudulent title. Victims may give bounty money or some form of bail, believing they’ve secured a new place to live.

What can happen if a certificate or title is stolen?

If someone stole the deed or title to your property, they managed to falsely impersonate you and transferred ownership of the property to someone who is Not She. In doing so, they can borrow against the equity you have built up in the property (one reason seniors are common victims). And if there’s no existing loan on the property, a thief might be able to acquire it even more easily.

Unfortunately, homeowners are sometimes less vigilant about the bills and tax filings that come in each month or year, especially for a property that is not their primary residence. This inattention can allow scammers to sneak in and change the title before the owners even notice any suspicious activity.

At worst, criminals can use a fraudulent home title to sell the property to unsuspecting buyers without the true 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 media coverage of fear tactics you may 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 mortgages or liens
• The property is vacant and not closely monitored
• The property belongs to a vulnerable, elderly or otherwise vulnerable person

Even for vulnerable properties, this crime is difficult to carry out, mainly due to its complexity. Most places require witnesses for a transfer of ownership, and even then, more fraudulent paperwork would be required to fool an ownership company and lender and make it to closing.

How to protect yourself from title theft

Keeping track of property records, bills, and incoming mail can help homeowners reduce their risk of being targeted for this crime. Additionally, routine checking of your county records and personal credit history can help protect you overall from identity theft. You can get a free copy of your credit report once a year through AnnualCreditReport.com and monitor your credit score with any of the three major credit reporting agencies (Equifax, Experian, and TransUnion).

Many standard title insurance policies – a typical expense involved in getting deals – also offer some level of protection against fraudulent activity.

What to do if you are a victim

If you think you’ve been the victim of title fraud, chances are your personal information has been compromised. Freezing your credit is an excellent step to minimize further damage.

Also, be sure to promptly file a report with the Federal Trade Commission’s website, IdentityTheft.gov. This government agency can help you report and recover from identity theft and provide you with an action plan to follow.

bottom line

Ultimately, while home title stealing is certainly scary, it is quite rare. You are unlikely to fall victim to this type of real estate scam if you keep a close eye on your bills, property taxes, loans, and other personal information.