Mortgage Theft: A Common Crime You Need To Know

Home title theft, also known as deed theft, deed fraud, or mortgage fraud, is a real crime that involves thieves forging ownership documents to steal a property, sell it for profit, or refinance the owner's mortgage to steal their equity. While it is a serious threat, it is rare, and lenders, title companies, and real estate firms have safeguards in place to prevent it. Title insurance, which can be purchased by homeowners, also provides protection against title theft. According to the FBI's 2023 Internet Crime Report, there were 9,521 complaints of real estate fraud, including title theft, that year, with losses totaling $145,243,348.

Home title theft is rare but can have serious consequences

Home title theft, also known as deed theft, deed fraud, or mortgage fraud, is when a criminal forges an owner's name on a deed or mortgage, steals the money from the sale or loan, and transfers the property under their name. While this type of identity theft is rare, it can have serious consequences for the homeowner.

Homeowners who experience identity theft are especially vulnerable to home title theft. In 2023, 28% of title companies encountered at least one attempt at seller impersonation fraud. Thieves usually target unoccupied properties and those without a mortgage. They may also convince seniors or homeowners in crisis to refinance their mortgage, then use the information to document the transaction.

To steal someone's title, thieves first obtain documents that help them steal the victim's identity, such as a social security number. They then use the false identity to steal the deed to the victim's property. The deed is the document that establishes someone's title, or legal ownership, to a property. Once a thief has the deed, they can sell the home or refinance it to borrow and steal the owner's equity.

Homeowners can take several measures to protect themselves from home title theft, including signing up for property alerts, monitoring their credit and mail, and purchasing title insurance. Title insurance protects buyers and lenders if their purchase or loan is void due to fraud. Additionally, many counties offer a free notification service that will alert homeowners if documents are filed against their property. Staying vigilant and utilizing free services can help homeowners protect themselves from the serious consequences of home title theft.

Title thieves use false documents to refinance your mortgage or sell your home

Home title theft, also known as deed theft, is when someone fraudulently claims ownership of a home that belongs to someone else. Title thieves then use false documents to sell the home for cash or refinance the mortgage to borrow and steal your equity.

Homeowners who experience identity theft are especially vulnerable to home title theft. Identity theft is usually the first step in title fraud because the thief needs to make the forged home deed look legitimate. To steal your title, thieves can forge your name on any document, including a deed supposedly transferring the title to them. Such a deed could be filed with the county register of deeds. However, a forged deed is not valid and conveys nothing. Only you can legally transfer your title to a third party. If a buyer or lender relies on a forged deed and doesn't do their due diligence on a property's title, they are out of luck.

Title insurance is available to protect against title theft but may be unnecessary

Home title theft, also known as deed theft, is when someone fraudulently claims ownership of a home that belongs to someone else. Title thieves use false documents to refinance your mortgage or sell your home without your knowledge. They can also withdraw equity from your home and leave you with a new mortgage.

However, title theft insurance may be unnecessary. Title theft is rare, and it is difficult for thieves to sell properties to knowledgeable buyers or lenders due to the many safeguards in place. Title companies also search for and alert buyers to title issues before closing. Additionally, title insurance does not cover all expenses related to clearing a title, and it may not be worth the cost for this reason. Furthermore, some policies may not cover title fraud that occurs after the purchase of the property, so it is important to carefully review the terms of the policy.

Title theft is a type of identity theft, which is usually the first step in title fraud

Identity theft is usually the first step in title fraud. Once a thief has your personal information, they can use it to make the forged home deed look legitimate. They can then transfer your house title to their name and steal money or property. For example, a thief could use a forged deed to cash out your equity or sell your home and pocket the proceeds. They might also pose as the owner to refinance the mortgage, withdraw the equity, and leave you to pay the new loan.

While title theft is rare, it poses a serious risk to your home and finances. To protect yourself, you can monitor your bills and credit report, and buy title insurance when you close on your home. This will provide you with resources to nullify title theft if it happens.

There are several warning signs that title theft is occurring or is about to occur

Home title theft, while on the rise, is not a very common crime. It is a type of real estate fraud where thieves use false documents to refinance your mortgage or sell your home without your knowledge. They may also withdraw equity from your home and leave you with a new mortgage. This type of identity theft is rare but poses a serious risk to your home and finances.

• Monitor your credit report and be on the lookout for unfamiliar purchases, credit cards you didn't apply for, missed payments, or other fraudulent charges.
• Be cautious of unknown texts, calls, or emails that could be phishing schemes or other cons.
• Receiving mail about a mortgage policy you didn't apply for could indicate that fraudsters have tried to take out a mortgage on your property.
• Bills or customary homeowner mail, like notices, stopping to arrive could be a sign of title theft. Scammers may try to hide any fraudulent activity by changing the mailing address for your home's bills.
• A credit monitoring service notifying you of identity theft or illegal activity.
• A real estate professional contacting you directly with an offer or charging upfront fees.

Frequently asked questions