Housing valuations continue to climb, which means home equity has soared for homeowners… unless someone commits identity theft to steal that equity. Home equity theft, deed theft and title theft are on the rise, and many real estate and government officials fear it could have a major impact on homeowners in hotspots across the country.

If you’ve been wondering, ‘Is home title theft a real problem?,’ read on to learn the basics about home equity theft.

What is home title theft?

Home title theft—also known as deed fraud or property title fraud—is when someone illegally takes ownership of your home or property by forging documents or using other deceptive methods. In a nutshell, the thief manipulates your property’s paperwork to transfer ownership to themselves without your knowledge or consent.

This type of crime stems from historical practices of property and document fraud. In ancient times and during colonial eras, land theft and fraudulent transactions were common, made easier by forged documents and weak legal frameworks. Conflicts over ownership led to robust record-keeping and verification processes.

Today, home title theft is gaining attention due to technological advancements and high-tech fraudsters. With modern banking, real estate transactions, and digital records, this crime has become more sophisticated. Cybercriminals use various techniques such as identity theft, hacking into databases, and creating counterfeit documents to steal property titles and ownership rights.

This problem isn’t just a hassle, it leads to serious financial and legal consequences for the rightful homeowner, as you may lose property or face challenges in proving your ownership.

Is home title theft real?

Home title theft is real and is a long-running form of identity theft. The FBI first warned about it in 2008, but soaring home values around the U.S. have added fuel to the fire, attracting identity thieves.

This scam has countless variations but most often involves a fraudulent ownership transfer followed by a fix and flip, a quick sale, or a property rental scam. Scammers also use Home Equity Line of Credit (HELOC) loans to squeeze cash out of these stolen homes.

In one early case investigated by the FBI and IRS, a real estate professional in Los Angeles pled guilty to an operation that defrauded more than 100 homeowners and lenders for over $12 million. The woman promised to help struggling owners lower their mortgage payments, but instead, she and her partners organized sales of the

properties and pocketed the money borrowed in those sales. This is just one of many real-life examples of home equity theft.

How does property title fraud occur?

There are many ways it can happen! Thieves steal your personal info for identity theft, like your Social Security number (SSN) or driver’s license, to pose as you and take out loans or change property titles. They also make fake documents, such as deeds or mortgage papers, to falsely claim ownership.

Cybercriminals use hacking and phishing tricks to get into databases or trick you into giving sensitive info, which they use to transfer property titles. Sometimes, they start fraudulent real estate deals, getting you to sign documents that transfer ownership without your knowledge.

Also, forgeries are essential in most deed scams. In many investigations, notaries whose names appeared on legal documents swore their signatures were fraudulent. Indicating that scammers altered a legitimate notary’s signature in some cases.

Home title theft is a form of criminal identity theft. For the greed to succeed, a con artist creates a profile of the homeowner by combing social media, online property records and other sources like the dark web to gather details about the homeowner they plan to impersonate.

This is why it’s so important for you to protect your privacy online. However, that’s not the only place they’ll dig for information. Crooks will even ‘case’ a neighborhood, talking to area residents to learn even more about the targeted home and its owner.

In most instances, fake deeds are filed with a city or county property records office. The actual owner could be deceased or still living at the address. Thieves often target seniors who have owned their home longer and have built more equity; however, vacation homes and vacant houses may be targeted as well.

And it’s not just individuals who are targeted in home equity theft. Legitimate title companies targeted with phishing emails may unintentionally share critical email login details and other data that aids the thief.

What are the signs of home title theft?

Be vigilant and regularly monitor your property-related documents and financial activities to help you catch any early signs of home title theft. This way you can act immediately to protect your ownership rights.

Here are some warning signs that it may be happening:

  • Unexplained documents: Be suspicious if you receive unfamiliar documents related to your property, such as mortgage statements or title transfer notices.
  • Unexpected changes in ownership: If you receive notifications of changes in property ownership or notices of new mortgages or loans you didn’t authorize, it’s a red flag.
  • Missing mail: If important property documents, such as tax assessments or title deeds, suddenly stop arriving in your mail, it could be that someone redirected your mail to pull off a scam.
  • Suspicious financial activity: Keep an eye on your financial statements for any unusual activity related to your property, such as payments to unfamiliar entities or sudden changes in mortgage payments.
  • Alerts from credit monitoring services: If you use these services, they may alert you to any new accounts opened in your name or changes to your credit report that could be linked to home title theft attempts.

Is title insurance a rip-off?

Not necessarily, but it doesn’t do what you think it does. When you buy a home, the lender often requires title insurance to protect against problem titles, past liens and other issues that might have happened before you take ownership of your new home. The word “insurance” can confuse new buyers who think it also covers them against deed theft. An owner’s title insurance may protect against forgery, but you should ask for these policies, as they may be optional.

When a property deed is part of a scam, lawyers and judges often need to restore it to a “free and clear” state. Legal expenses associated with this issue can add up quickly for the homeowner.

Is a home title lock necessary?

It depends on your needs, but there may be better options available to you. Glossy TV ads now promote title lock services or title lock insurance, with one major firm using well-known celebrities and politicians to lure you in. But all most title lock services do is periodically review court records—which you can do yourself. Plus, many don’t offer resolution services and their monthly fees run as much as a comprehensive identity monitoring plan.

Identity theft lies at the heart of deed fraud. The best way to dodge ID theft is to protect your personally identifiable information (“PII”).

Here are some other steps that can also reduce your risk of deed fraud:

  • If you have an actual deed in your possession, don’t leave it where guests or workers can see it. Make sure you store it somewhere secure.
  • Check your credit reports often. The first indicator of fraud may be a rapid decline in your credit score or the addition of new accounts you never opened.
  • Check your county records to see if the information is viewable online. Many agencies have switched to digital records that are searchable and include a chain of titles.

How to protect yourself from home title theft

California now requires a thumbprint on notary forms to deter fraud related to home equity theft. In five other states, deeds to transfer property now require witnessing by disinterested parties.

Similarly, the City of Philadelphia launched Fraud Guard Alerts in 2019 to address the rash of deed theft in their city.

Here are some steps you can take to protect yourself from home title theft:

  • Monitor your financial accounts and statements.
  • Keep documents with your personal information secure.
  • Use strong account passwords and two-factor authentication for added security.
  • Be cautious of phishing emails and scam websites that may trick you into revealing personal information.
  • Consider title insurance which can protect against losses due to title defects, including fraud and forgery.
  • Regularly check your credit reports for any suspicious activity or unauthorized accounts opened in your name.

How can IDShield help you stay protected?

Homeowners who keep a close eye on their personally identifiable information (PII) make it harder for crooks to build profiles with their data. Services such as dark web identity monitoring, personal data monitoring and credit report monitoring add more levels of protection. IDShield offers these services, plus anti-malware protection, mobile security, password management, VPN and social media monitoring.

IDShield scours the internet and dark web 24/7, plus many other data repositories to detect the theft or misuse of private IDShield membership, you could have more peace of mind knowing you’ll discover the warning signs of home equity theft before it becomes a major problem for you and your home. Explore IDShield tools that monitor your online presence. You can also get answers to frequently asked questions or contact IDShield today!