The Boston Division of the Federal Bureau of Investigation (FBI) recently warned property owners of the continuing increase in reports of home title theft, or quit claim deed fraud. This type of fraud is usually not readily detectable until it is too late, and the homeowner discovers their property has been sold.
What is it? Quit claim deed fraud, also known as home title theft, is a type of identity theft. The criminal uses personal information gathered (usually in a nefarious manner) to assume the identity of the owner, then forges documentation to record the fake transfer of ownership. Once complete, the criminal then sells, mortgages, or rents the home or property, while the true owners must go to court to recover their property.
How does it happen? According to the FBI, reports include myriad scenarios, including those who target properties with no lien or mortgage, family members, and “title pirates” who take over the title by forgery. In each instance the property is conveyed, either through fraud or conversion, then sold for financial gain. Rocket mortgage reports other methods, as well, such as refinance or home equity line of credit (HELOC) fraud, in which identity theft is also used, but leaves the owner with a second mortgage on the property.
What are some of the signs you should look for? The National Association of Realtors indicates one major red flag is the absence of property tax or utility bills or receiving unsolicited notices from banks or financial institutions. If you notice that your mortgage, homeowners’ insurance, or taxes are no longer automatically deducted from your account, it may also be a sign, says Experian.
What can you do to prevent it? There are several steps a property owner can take to safeguard their real estate. If possible, set up title alerts with your county clerk and online real estate sales search alerts for your property. Check your property records online on a recurring basis for any activity. If you stop receiving utility or property tax bills, immediately determine the reason.
What about title lock insurance? The Federal Trade Commission reminds us that title fraud is actually identity theft, in that someone pretends to be you and transfers the deed to someone else, and title lock insurance does not stop that, but protects you subsequent to the theft, in the aftermath that follows.
