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A Homebuyers Guide to Protection Against Property Title Forgery

Monday, June 14, 2021

Every year, around nine million Americans become victims of identity theft. Having your identity stolen can lead to months or even years of legal fights and fees as you try to sort out the mess and restore your credit.

For a subgroup of victims, the losses will go far beyond decimated credit scores and paperwork headaches. Some of them will lose their homes via property title forgery. 

Here's what every homeowner needs to know about protecting themselves and their properties from title forgery and fraud. 

What Is Property Title Forgery?

At first glance, it seems impossible that simply having one's identity stolen can result in the loss of something as stable and substantial as one's home. The steps from identity theft to title forgery are much smaller than one might expect, however. In most cases, the process goes like this: 

  • Identity thieves target a homeowner with good credit
  • The thieves then steal the homeowner's identity
  • Using the stolen identity, the thieves create a fake transfer document that re-registers the home in their name 
  • Thieves then take out loans against the value of the property they have fraudulently claimed 
  • They spend this money with no intent to pay it back

When the thieves fail to repay what they owe, the lender they borrowed money from moves to foreclose on the home they offered up as collateral. This is often the first time that homeowners discover their home has been caught up in such a scheme. 

Identity thieves are not the only people who perpetrate property title forgery, however. It can also happen when a spouse, friend, or family member tries to transfer ownership of a property without the consent or knowledge of one or more of the rightful owners. In rare cases, it occurs when an attorney or other representative of the legal owner forges documents giving themselves ownership rather than transferring the property to the party they were meant to. 

Who Is at Risk

Anyone who has had their identity stolen is at risk of title forgery. However, seniors and individuals who own their homes outright and have good credit scores are most likely to be targeted

Protecting Yourself Against Fraud

Fortunately, there are ways for homeowners to protect themselves and their properties against such forgery and fraud. These include:

  • Careful management of personal information
  • Personal monitoring for warning signs
  • Third-party monitoring and alerts 
  • Purchasing a title insurance policy

Managing Personal Information 

At its most basic, managing personal information to prevent identity theft includes simple habits like:

  • Only sharing personally-identifying information, such as your social security number, when necessary and with authorized parties
  • Collecting mail promptly and securely storing or shredding any documents bearing sensitive information 
  • Using appropriate anti-virus and protective services when online 
  • Using complex online passwords and changing them regularly
  • Restricting who has access to your ID, credit cards, and other documents 

When individuals follow these types of practices consistently, they cut down on opportunities for identity thieves to steal their information. They also make themselves less attractive targets. 

Personal Monitoring 

The next step up in protecting yourself from title forgery is to personally monitor changes to your credit and homeownership. This can involve ordering a free copy of your credit report at least once per year and reviewing it for inaccurate information. It may also include periodically looking up your home in public records databases to ensure that the information on record remains correct.

Perhaps the simplest option is simply staying on top of your bills. If you stop receiving common bills, such as those for utilities or taxes, at any property that you own follow up immediately. While it's possible it is a minor billing error, it can also be a critical early warning sign of someone fraudulently transferring ownership of your home.  

Third-Party Monitoring and Alerts 

In addition to monitoring things yourself, you can hire a third-party company to monitor your identity and transactions for you. Often, companies such as credit card providers offer these types of services for free or for a small annual fee. Independent companies dedicated solely to identity theft protection can be more expensive but also more thorough. 

Using these services can be ideal if you:

  • Own multiple properties that may be at risk
  • Have concerns about potential fraud by a spouse or family member who has access to your life and documents 
  • Primarily use automated bill-pay services that make it difficult to identify when bills are missing 
  • Do not feel able to effectively monitor things yourself for any reason

It is important to keep in mind, however, that while all of these steps can help you identify identity theft and fraud early, they do not offer any protection against the costly consequences of such a theft if it occurs. For that, you need title insurance.

Buying Title Insurance 

Standard title insurance policies offer protection against legal threats to your home. This includes:

  • Challenges to your title
  • Forgery and fraud
  • All of the steep legal expenses that go with those things. 

While it is less well understood, title insurance serves as a counterpart to regular homeowners' insurance. Homeowners' insurance covers physical threats such as storm damage and the theft of belongings in a home. Title insurance addresses all the other threats a property and its owner might face.

For this reason, many mortgage lenders require homeowners to have such insurance. 

Not all lenders do, however, which can leave homeowners at risk. Given how affordable title insurance is, it is in every homeowners' best interest to make sure they have an appropriate policy whether they are required to or not. 

In the event that someone does try to forge your title and steal your home, having title insurance means that you don't have to fight for your rights or the restoration of your property alone. Instead, you will have the support and funding of experts who can help you get back on your feet without losing your home. 

Protect Your Home

Protect your home from property title fraud by exploring title insurance options today. Have questions? Speak to one of our experts and let us help you choose the policy that's right for your home. 

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