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Home title fraud occurs when someone obtains the title of your property—usually by stealing your identity—to change ownership on your property title from your name to theirs. The fraudster can then secure as many loans as possible using your equity as collateral. The real homeowner often is completely unaware of the scam until the lender starts to send letters indicating they intend to foreclose on the home. Home title fraud offers a potentially lucrative payoff for criminals skilled in identity theft.
Don't confuse home title fraud with mortgage fraud, which is when a potential homebuyer, seller or lender lies or omits key information that leads to a mortgage loan approval or terms that the applicant wouldn't normally qualify to receive.
How Often Does Home Title Fraud Happen?
Home title fraud, which was once considered rare, is now seen in some circles as one of the faster-growing cybercrime schemes in the country. In particular, the concern surrounds wire fraud, as the FBI reported 301,580 wire fraud complaints in 2017 with losses of $1.4 billion. Looking at just the real estate and rental industry, more than 9,600 victims lost over $56 million in 2017, according to the FBI.
Additionally, analytics firm CoreLogic reported a 12.4% year-over-year increase in mortgage fraud risk for the second quarter of 2018 compared with the second quarter of 2017. Their analysis also found an estimated one in 109 mortgage applications contained indications of fraud in 2018, compared with one in 122 the previous year.
How Does Home Title Fraud Happen?
Home title fraud is usually a result of identity theft. Many transaction and document requests are done online, which can increase the chances of criminals stealing information. Older people are the most common targets because they typically have more equity in their homes and may not be as online-savvy or pick up on signs of fraud right away.
Other targets of home title fraud are people who own second homes, vacation homes and real estate investment properties. This group of homeowners may not pay as much attention to these properties as their main residences and may miss notices or bills such as property tax bills, foreclosure notices or past-due notices. This gives scammers more time to commit fraud, and homeowners may not learn of the issue until well after the crime has been committed.
Phishing for Home Title Fraud
Another criminal tactic that has grown in popularity is phishing emails that ask a homeowner or homebuyer for their personal information so they can obtain their home title. Phishing is an attempt to get recipients to divulge sensitive information such as usernames, passwords and Social Security numbers, or to transfer money to the scammer through a variety of methods.
In 2016, the Federal Trade Commission warned homebuyers about email and money wire scams that included hackers breaking into consumer and real estate professionals' email accounts to get information about real estate transactions. The lesson: Verify the address of any website or origin of an email sent that is requesting personal information. Take the time to look at the company's real website and the actual email address used, and not just the one that appears in your email.
How to Protect Yourself From Home Title Fraud
You can help thwart scammers by being diligent with your information. Here is a list of ways to protect yourself from home title fraud:
- Check your credit report. Checking your credit report can help you identify any financial action that may have occurred in your name and help you determine if you have been a victim to identity theft.
- Pay attention to incoming bills. Make sure you are receiving all your bills, such as the tax bill, water bill, mortgage bill and so on. Not receiving an expected bill can be a sign of home title fraud or possibly identity theft.
- Check home information. Check the information on your house with your county's deed office every so often to make sure nothing has changed.
- Get help from third-party services. There are service providers in the market that can help protect against home title fraud, either through title insurance or title protection by "locking" your title. Research any prospective companies first before signing up because scammers will pose as these type of businesses too.
What to Do if You Think You Are a Victim of Identity Fraud
If you think you are a victim of identity fraud as a result of home title fraud, here are steps to take immediately to start protecting your identity. Go to Experian's identity theft help page for more details.
- Add a one-year fraud alert to your credit report
- Review your free Experian Credit Report
- File an identity theft report with your local police department
- Notify Experian to resolve fraudulent activity on your credit report
- Add a seven-year fraud victim alert to your credit report
Detecting fraudulent activity early is the key to minimizing the damage that thieves can do to your credit. Experian's credit monitoring service checks your credit reports daily and notifies you when key changes are made. You can also get a free dark web triple scan or consider signing up for identity theft protection to protect yourself in the future.
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This service is completely free and can boost your credit scores fast by using your own positive payment history. It can also help those with poor or limited credit situations. Other services such as credit repair may cost you up to thousands and only help remove inaccuracies from your credit report.