You may have heard about home title theft — perhaps you’ve conjured up an image of someone stealing a special piece of paper from your filing cabinet in the middle of the night. Home title theft is a real crime, but what exactly does it entail? Let’s dive into some specifics surrounding home title theft, what happens if your deed is missing or stolen and finally, a few ways you might protect yourself as a homeowner.
What is home title theft?
Home title theft is a type of real estate fraud. It occurs when someone steals the title to someone else’s home. The fraudster will likely begin by obtaining documents that help them steal someone’s identity (perhaps something like a social security number). The fraudster will then use the false identity to steal the deed to the victim’s property. The deed is the document that establishes someone’s title, or legal ownership, to a property. By stealing the deed (and, effectively, the title), the fraudster may take advantage of the home equity the real homeowner has built up by taking out a home equity loan, or even attempting to falsely sell the property for profit.
What to do if your deed is missing or stolen
If your deed is missing or stolen, you may feel like it’s time to panic. While this instinct may be natural, a missing deed isn’t always cause for concern. If your deed is missing and you don’t have reason to believe it’s been stolen, it may be as simple as requesting a new copy from your local county clerk’s office. If you believe your deed was stolen, then you may have genuine cause to worry about title theft and should consider taking the following steps:
- Contact your mortgage lender: Your mortgage lender will be able to help point you in the right direction. They may have a process for dealing with suspected title theft to help you protect your asset and prevent the fraudster from opening other accounts in your name.
- Put credit bureaus on notice: If you believe you’re a victim of home title theft, you’re likely also a victim of identity theft. Fraudulent accounts that go unpaid may negatively impact your credit score. By notifying the credit bureaus and requesting a fraud alert be placed on your credit file, you’ll be able to prevent and dispute suspicious activity with more ease.
- File a police report: Home title theft and identity theft are crimes. By filing a police report, you’re beginning paper trails that may help protect you if the situation advances.
How to monitor and protect your home title
By now, you may be understandably interested in finding ways to more actively protect yourself from home title theft. One potential way to do so might be to get title lock insurance, a service that monitors your deed on your behalf. If there’s any suspicious activity or your title has been transferred under another name, the service is meant to notify you. While title lock insurance does use the word “insurance,” it’s important to understand that it doesn’t necessarily operate as a typical homeowners insurance policy would. Though title lock insurance companies offer notifications about your title, they typically only notify you after the deed (no pun intended) has been done. Title locks don’t generally troubleshoot the issue or provide any sort of coverage for it.
Is a home title lock necessary?
A home title lock (or title lock insurance) isn’t required for homeowners. While home title theft is certainly a scary concept, it isn’t known to be common, so the money spent on a title lock subscription might be put to better use elsewhere, like investing in your home. You may also want to consider getting title insurance before you become a homeowner, which helps clear up and protect future claims against your property’s title.
Home title theft is a subset of identity fraud. It happens when someone successfully steals your deed and transfers your property under their name. They may try to borrow against your home equity or even attempt to rent or sell the property for personal profit. If you notice your deed is missing or suspect it was stolen, consider reaching out to your lender to discuss the best next steps to help protect your assets.