Title fraud protection

title fraud
Title fraud and house stealing (infographic from fbi.gov)

In the wake of the largest consumer data breach in history, ads for credit monitoring and other related services are flooding the airwaves.  One of these associated services is home title monitoring.  These commercials claim that they will protect you from home stealing and title fraud.  But what is home title monitoring and is it worthwhile?

According to a FBI report (fbi.gov) “House Stealing, the Latest Scam on the Block,” house stealing is a combination of two popular “rackets:” identity theft and mortgage fraud.  The 2008 report described a couple of versions of how the scam is perpetrated.  One form of this crime is committed by obtaining a cash-out mortgage posing as you to get a check at settlement.  Another form is committed by fraudulently taking title to your home and then selling the home for the proceeds.  Although fraudsters frequently target vacant homes, house stealing can also occur while you’re still occupying your home.  The FBI describes how scammers perpetrate house stealing and title fraud:

Here’s how it generally works:
-The con artists start by picking out a house to steal—say, YOURS.
-Next, they assume your identity—getting a hold of your name and personal information (easy enough to do off the Internet) and using that to create fake IDs, social security cards, etc.
-Then, they go to an office supply store and purchase forms that transfer property.
-After forging your signature and using the fake IDs, they file these deeds with the proper authorities, and lo and behold, your house is now THEIRS* [*Since the paperwork is fraudulent, the house doesn’t legally belong to the con artists.]
There are some variations on this theme…
-Con artists look for a vacant house—say, a vacation home or rental property—and do a little research to find out who owns it. Then, they steal the owner’s identity, go through the same process of transferring the deed, put the empty house on the market, and pocket the profits.
-Or, the fraudsters steal a house a family is still living in…find a buyer (someone, say, who is satisfied with a few online photos)…and sell the house without the family even knowing. In fact, the rightful owners continue right on paying the mortgage for a house they no longer own.

Both forms of house stealing (or title fraud) are typically intertwined with mortgage fraud.  And because of the process, mortgage fraud usually has multiple conspirators carrying out the scam.  An example of this is the 2013-2014 sentencing of at least five co-conspirators (including a title company manager and mortgage broker).  These criminals perpetrated a complex multi-million-dollar mortgage fraud scheme that occurred in Maryland.  One conspirator sold homes that did not belong to her.

According to the FBI report, house stealing is difficult to prevent.  However, vigilance on your part is highly recommended.  Red flags include receiving payment books and/or late notices for loans for which you did not apply.  Additionally, it is recommended to routinely monitor your home’s title in the county’s land records. Any unrecognized paperwork or fraudulent looking signatures may be an indication of title fraud and should be looked into.  Title fraud should be reported to the FBI.

Title fraud protection

You can visit Montgomery County’s land records office and get information on searching your home’s title from the very helpful staff.  You can also search land records online.  However, you should consult a title attorney for a detailed title search.

A problem with searching land records is that it is not always definitive.  Of course, accuracy depends on those who prepare and file the documents with the county.  Common issues that are found in title searches are misspelled names and aliases.  Deeds and other related documents (such as quit claim deeds and mortgage satisfaction letters) are not always filed timely, or sometimes not at all.

After the Equifax breach, millions of consumers’ identifications are available to criminals to perpetrate house stealing/title fraud.  Title monitoring services tout their ability to protect you from such scams.  Before you decide to enroll, be aware of the fees, the limitations, and how it compares or differs from your owner’s title insurance policy (including cost).

Your title insurance policy may already protect you from title fraud.  According to the Maryland Insurance Administration’s A Consumer Guide to Title Insurance (insurance.maryland.gov), “Title insurance protects real estate purchasers and/or lenders from losses that arise after a real estate settlement…A title insurance policy provides coverage for legal defense, as well as the coverage amount listed in the policy, which usually equals the purchase price of the real property.”  Basic coverage typically protects you for fraud that occurred prior to settlement.  However, enhanced coverage may provide protection for fraud that occurs after settlement.

You should consult with a title attorney about your title insurance coverage and how it protects you from title fraud.

By DanKrell
Copyright© 2017

Original published at https://dankrell.com/blog/2017/10/22/title-fraud-protection

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Disclaimer. This article is not intended to provide nor should it be relied upon for legal and financial advice. Readers should not rely solely on the information contained herein, as it does not purport to be comprehensive or render specific advice. Readers should consult with an attorney regarding local real estate laws and customs as they vary by state and jurisdiction. Using this article without permission is a violation of copyright laws.

Identity Theft can lead to a stolen home

by Dan Krell
Google+

Identity theft and mortgage fraud continue to plague the nation; both crimes are an ongoing concern for law enforcement. Earlier this year, the Federal Bureau of Investigation (FBI.gov) reported that these types of crimes were increasing, as well as a new disturbing trend in real estate related crimes called “house stealing.”

You may have heard of identity theft; but maybe you did not know that once a perpetrator steals your identity, they can defraud others in many ways. The Federal Trade Commission (FTC.gov) states that besides unauthorized use of your credit cards, perpetrators can use your information to get jobs, healthcare services, social services, and open new accounts (including mortgages, utilities and credit cards).

In January, the FBI reported that there were over 1,200 open cases of mortgage fraud. Most of these cases were “fraud for profit,” where a scheme was used to flip homes to get cash and allow the home to go into foreclosure. Other cases involve corporate schemes and possible insider trading.

So what is house stealing? The FBI reported earlier this year that house stealing is a hybrid crime that is a combination of identity theft and mortgage fraud. There are several forms of house stealing, but essentially the perpetrator will fraudulently take title to your home or steal your identity to ultimately sell your home and disappear with the cash. This can even occur while you are occupying your home!

Perpetrators of house stealing will obtain your personal information much like other identity thieves, and use the information to sell your home. Although the end result is to take the cash from selling your home, the crime can occur by the perpetrator fraudulently taking title to your home and then selling it “for sale by owner” (usually providing little or no information to prospects), or the perpetrator can act as if they are you and list your home with a real estate agent (sometimes the agent may be in cahoots with the perpetrator).

The FBI only recently publicized this new trend as they prosecuted a woman in California who pleaded guilty to devising a scheme to defraud over 100 homeowners and $12 million from lenders (www.fbi.gov/page2/march08/housestealing_032508.html).

In their report, the FBI concedes that there is not much you can do to prevent a house stealing crime other than being vigilant; this may be due to the fact that most people do not go to the county court house on a regular basis to check the deed to their home. However, the FBI recommends that you check documents and signatures filed in the court house “from time to time.” Any discrepancies should be looked into (and reported to authorities) immediately.

Fortunately, there is more you can do to protect your identity. The NAR, in conjunction with the Federal Trade Commission (FTC.gov), has published a brochure called, “AvoID Theft: Deter, Detect, Defend.” The FTC attempts to educate consumers about identity theft; it is recommended that that you become aware of how these crimes occur so you can defend yourself from perpetrators, monitor your information regularly to spot any irregularities, and be prepared with a plan if you are a victim of identity theft. More information about protecting yourself from identity theft can be obtained from the FTC and FBI (and their corresponding websites).

This article is not intended to provide nor should it be relied upon for legal and financial advice. This article was originally published in the Montgomery County Sentinel the week of November 3, 2008. Copyright © 2008 Dan Krell.