It sounds unbelievable. Someone who has worked so hard to achieve home ownership is suddenly told that they are now not the actual legal owners.
Or it could be someone who owns a vacation home. They too find out they, in the eyes of the law, no longer own the property.
The reason behind these scenarios? A type of real estate fraud where a thief first steals a homeowner’s identity. They use that personal information to forge a deed to the home that then transfers the property to the thief or a third party. The thief might then take out a home equity line or line of credit on the property but never makes payments. The result? The true homeowner could possibly face foreclosure or eviction.
Who Do Fraudsters Target?
Real estate fraud overall is starting to become more prevalent, with 11,578 cases reported in 2021, totaling more than $350 million. This is an increase of 20% in the number of cases and a 525% increase in the value of losses.
Although home title fraud is not yet as prevalent as some other types of scams, it is increasing each year, according to the FBI. Fraudsters typically target:
1. The elderly — Scam artists target homeowners who have lived in their homes for years and may no longer have a mortgage. They will prey on the elder’s naivete and sense of trust, trying to confuse them into taking out a home equity line, a non-legitimate reverse mortgage or some other related home loan.
2. Victims of identity theft — Fraudsters will use stolen personal information found online or through other means to forge new paperwork that then allows them to transfer the home’s deed to themselves or a third party.
3. Owners of unoccupied buildings — Thieves also may target vacant buildings or vacation homes that are not occupied for lengthy periods of time, stealing the mail that is delivered there to access pertinent information.
6 Important Tips to Share with Your Clients
Share these important tips with your family and friends to help them protect themselves from this type of fraudulent activity.
1.Protect Your Identity — Especially Online
Thieves are becoming more sophisticated in how they steal information; therefore, It is crucial that you protect sensitive personal and financial information that can be accessed online. Always use different passwords that you change often and use a multi-factor authentication system.
Never share personal information with companies that you have not personally contacted.
2. Keep Track of Important Documents
If you stop receiving bills or financial statements, it may mean someone stole your mail or fraudulently changed your address. Make sure that all important paperwork related to your homeownership is kept in a secure place.
3. Check Your Credit Status
You are entitled to a free copy of your credit report each year at AnnualCreditReport.com. In addition, the three major credit reporting companies — Equifax, Experian and TransUnion — are currently offering free weekly online credit reports.
If you believe you have been a victim of identity fraud be sure to call your credit card companies to let them know and to request that a freeze be put on your credit.
4. Don’t Let Properties Go Unchecked
If you can’t regularly check on your property, pay someone else or a service to do it. Mail should be stopped all together from going to the property.
5. Consider Title Insurance
When you buy a home, you purchase title insurance to ensure there are no liens against the home.
You can also purchase a homeowner’s title policy after you buy the house as well to protect yourself from unforeseen liens or other financial claims against the home.
By Buffini & Company