When you think of home protection, code-activated security systems may come to mind. You probably don’t immediately think about protecting your title but home title theft happens when a criminal fraudulently transfers your property deed into their name. Sometimes called deed fraud, home title theft is rare but, when it does happen, it’s usually the result of identity theft.
For some, owning a home is a quintessential part of the American dream. So if you're a homeowner, your home probably ranks high on your list of most treasured possessions.
That's one reason why home title theft can be extremely frightening when it happens.
Sometimes called deed fraud, home title theft happens when a criminal uses forged documents to fraudulently transfer someone’s property deed into their name.
This gives the scammer the ability to then sell the property to an unsuspecting third party, pocketing the profits.
How common is home title theft? While the FBI issued a warning about house stealing back in 2008, it remains an uncommon fraud type.
When it does happen, it’s usually the result of identity theft.
How home title theft scams work
In order to pull off a house-stealing scam, a fraudster needs to first identify a house to target.
While any property could work, vacation and rental homes are particularly vulnerable because the homeowners are less likely to be physically present and may not be paying as much attention to bills and other mailed notices.
Senior homeowners are also more susceptible as they’re more likely to have paid off a good chunk of the mortgage which could equal more equity for a criminal to fraudulently borrow against.
The other key ingredient is the homeowner’s personal details. This information can be pulled from a variety of sources: social media, the dark web, or even phishing scams. The goal is to assemble enough pieces of information — like a homeowner’s full name, Social Security number, and birth date — to falsify identifying documents such as a driver’s license and Social Security card.
Using phony IDs and forged signatures, the fraudster then files paperwork with the county’s recorder of deeds to transfer ownership of the property to themselves or to a third party.
The rightful homeowners may not find out about the scam until new “owners” knock on the door... or worse: thieves aren’t likely to make any payments on loans tied to the property and the home could go into foreclosure.
In most house-stealing scams, the fraudster never actually takes possession of the home because a forged deed is not legitimate so the truth eventually prevails.
But proving the fraud to the proper authorities and recovering from any related identity theft can take time and resources.
Signs of home title theft
If you're concerned about home title theft, the first line of defense is to stay alert to common warning signs.
If you’re an Allstate Identity Protection member, you can activate credit monitoring and view your credit report. Keep an eye out for information or activity you don’t recognize including hard inquiries, incorrect aliases or address changes, or changes to your mortgage.
It's also smart to carefully review your incoming mail. Be on the lookout for bills or statements you don't recognize. And if the home-related bills you expect to receive, like utility or mortgage bills or statements, suddenly stop arriving, that can be a warning sign, too.
How to prevent home title theft
Currently, there is no solution on the market that can proactively lock your home title the same way you can lock your credit.
While locking your credit actually makes it harder for someone else to open an account in your name, what’s advertised as title lock insurance is often just a deed monitoring service that alerts you if a deed has been transferred out of your name — which is after the damage has already been done.
In most counties, you can access this information for free online. Some local governments even offer complimentary property fraud alerts that call or email you whenever a document is filed that relates to your property.
Instead of paying for a dedicated title lock insurance, consider signing up for free alerts or using a more comprehensive identity monitoring service that includes full-service restoration, like ours.
In a house stealing scam, the deed may be forged, but the identity theft is very real. Luckily, so is our protection.