What is Title Fraud?

Just like cars, homes have titles which are documents showing proof of ownership. If you are making mortgage payments and do not yet fully own your home, the title is held by the lender. When you make the final payment, the title to your home will belong to you. When your home is bought and sold, the title will change hands. What could go wrong?

The exchange of title is usually overseen by an escrow company when the home sale closes. It sounds pretty simple, yet title fraud is a real thing. 28 percent of US title insurance companies reported at least 1 instance of seller impersonation fraud in 2023.

Types of Title Fraud

A common type of title fraud (also known as deed fraud) might involve the illegal transfer of ownership using forged documents. Bad actors search public records to attempt identity theft and manipulation of actual titles. They might forge signatures also, and then submit the altered documents to the Recorder’s office. They may try to sell the property, rent it or even take out home equity loans against the property.

Some fraudsters target seniors who own their homes outright, but may not notice when title fraud is happening. Common targets are unoccupied homes, rental properties or vacation homes often left empty. There are also cases where struggling or unsuspecting homeowners are conned into refinancing their mortgages, only to discover they have exposed themselves to huge risks.

Identity Theft and Title Fraud

Title fraud often starts with some type of identity theft. Personal and property records are easily accessed online. If you have ever experienced personal identity theft (such as credit card fraud, “skimming” at an ATM, etc.) you know what a hassle it can be to resolve. Title fraud can start with identity theft and lead to serious, life changing consequences, including:

• Potential loss of your property
• Catastrophic financial liability
• Damage to your credit score
• Legal costs
• Emotional anxiety

Protect Yourself from Title Fraud

Stay on top of your bank statements and utility bills. If you suspect your title is compromised, report it immediately to local authorities and your lender if you have one. Check the address of your home at your county Recorder’s office  to confirm your title information on file is accurate.

Review your county’s procedures for sending out tax bills. Most tax bills are sent out at least once or twice a year. If you do not get a tax bill for more than a year, start investigating. Contact a real estate attorney with knowledge of title disputes as soon as you discover a problem. The potential for harm is real.

Know Your Rights. Protect Yourself.