What is Home Title Fraud and How to Protect Yourself From It

Title Insurance agreement in the hands of a businessman.

Millions of homes change hands in the United States every year. Most of those transactions are voluntary, but some are not.

Of those non-cordial transfers, a percentage takes place due to home title fraud.

If you’ve ever been the victim of home title fraud, you know the horrendous fallout that occurs after a problem occurs. For those who haven’t experienced title fraud before but are curious to know what it is and how you can avoid it, you’re in the right place.

In this post, our team breaks down home title fraud basics, the consequences, what you should do if you’re a victim, and how you can try to prevent fraud from happening to you. Keep reading to learn everything you need to know!

What Is Title Fraud?

Here’s a question for you… What is it that tells the world that the house you live in belongs to you? While not overly sophisticated or secure, the single most important item that proves homeownership is a home’s deed/title.

That title is a document that sits with your county clerk. It has the signature of the person that sold the house to you, your signature as a buyer, and a couple of witnesses.

Title fraud is when a bad actor has aggregated enough of your personal information to conduct a false title transfer by pretending to be you. When they do this, they’ll sign over your house to a third party. After, there will be enough confusion where the person who was falsely awarded your property can now claim ownership and enjoy that status’s privileges.

Who Is at Risk of Title Fraud?

Anybody that owns a home can be the victim of title fraud. Typically, fraudsters like scamming older adults that aren’t likely to notice if things regarding their home’s ownership status go awry. To that end, a whopping 3 billion dollars is mined from older Americans via real estate and related financial scams on an annual basis.

Don’t assume you’re safe if you’re young. Young, absentee property owners are also prime targets for title fraud.

Title fraud is a crime of opportunity. With that in mind, people who are loose in sharing their personal information online (and off) put themselves at a higher risk of being targeted.

What Fallout Comes From Title Fraud?

There are a handful of impacts that title fraud can have on victims.

For starters, somebody that has falsely been signed over the title to your home may claim that the home you’re in belongs to them and that you’re squatting in it. That would be a brazen move, seeing as how putting your home’s ownership status in front of authorities would shine a light on a fraudster’s scam. This brazenness has happened before, though.

More likely is that fraudsters with false ownership status over your home will take out loans against it.

Those two possibilities scratch the surface of what you can expect of people with false ownership of your residence.

How Can You Tell If You’ve Been Hit With Title Fraud?

Title fraud can be hard to suss out, seeing how many of the initial flags that take place when you’re being scammed will need to be raised by the county.

If the county sees a transfer of title take place, hopefully, they’ll notify you via the contact information they have on record that a change has been made. If that happens and you haven’t initiated anything, call the county immediately.

For those who are not so lucky as to be notified by the county, keep an eye out for strange bills or bank communications flooding your mailbox. As fraudsters cut deals with your home as collateral, a paper trail will start forming that you can follow up on to notify involved parties that something may have gone wrong.

Prevention Is the Best Medicine

Avoiding home title fraud is aided by making good choices with your personal information. Remember, for fraudsters to try to be you to execute a title scam, they’ll need to have some of your personal information.

By safeguarding information like your home’s status with the bank, your prior addresses, social security number, and so forth, you’ll make it so scammers will see others as much more viable targets in their scheme.

Also, with whatever title company you initially did your actual title transfer with, see if they have title insurance they sell. Being covered by a title insurance package may put additional protections in place and should help offset the cost of legal damages you’ll incur should you have to fight a bogus transfer in court.

And remember, if you suspect you’ve been hit with home title fraud, make the police among the first parties you call.

Millions of Dollars Are Lost to Home Title Fraud and Real Estate Scams

Hundreds of millions of dollars evaporate due to home title fraud and other real estate scams every year. Our advice to you to protect yourself from these scams is to stay informed, protect your information, and call for help if you notice red flags start to pop up.

It’s never a good option to stick your head in the ground if you think something fishy could be going on with your home’s title. Call the county, call the police, and be proactive in avoiding getting scammed where possible.

For more information on home title fraud prevention, signs of home title fraud, and more, we welcome you to browse some of the newest real estate content on our blog!