What happens if someone steals the deed to your house? (Home Title Theft)
March 14, 2024
Your home is one of the most valuable things you can own. However, real estate fraud affects over 11,700 people annually, and deed fraud is just one type of crime that can take homeowners by surprise[1].
Learn more about this type of theft to protect yourself and ensure you’ll be able to keep enjoying your home sweet home.
What is Deed Fraud?
Also called “home title fraud,” deed fraud is house theft. It happens when someone lays claim to your home’s real estate title and transfers it into their name without you knowing. It grants the criminal the rights to the home, the home’s equity, or rental income from the home.
What are the Signs of Deed Fraud?
Home deed theft can and does happen, and the results can be devastating to the rightful homeowner. Home theft doesn’t usually go completely unnoticed. There are often clues. Signs of a title theft risk include:
- Receiving mail regarding your home you didn’t sign up for or paperwork for home services you don’t recognize.
- Missing mail or paperwork about your home that you do expect, such as tax information or bills.
- New credit history activity that you don’t recognize, including new lines of credit that you didn’t open.
Also, if you suddenly get phone calls from real estate professionals about your home, and it isn’t on the market, this could be a red flag. Anything suspicious should be treated as a possible fraud attempt and taken seriously.
How Home Title Theft Works
Deed fraud is a combination of identity theft and the illegal transfer of a home’s title into someone else’s name. It can’t usually happen without someone assuming your identity or claiming to be the rightful owner. Because of the identity fraud involved, home title theft can sometimes be just one of many crimes committed by the same person.
What Can a Thief do with Your House Deed?
The damage can add up once a criminal has the deed to a home in their name. So, what happens if someone steals the deed to your house? Here are some of the things they can do as the new “owner” of the home:
- Get cash from the equity in your home as a home equity line of credit (HELOC) or part of a refinanced mortgage.
- Sell an empty home or commercial property assets.
- Take the rental income from a home.
Scammers may also approach a homeowner as a fake lender with an offer to refinance at a lower rate. This more commonly happens to homeowners in financial trouble, who then sign paperwork unknowingly giving ownership to the scammers.
The types of scams can change, but once a criminal has a home deed, it can be hard to reverse course and get rights to the stolen property back. Title theft may result in the homeowner losing their family home through unauthorized sale or foreclosure.
How to Protect Your Property Against Title Theft
A home is a substantial investment that you can protect with some planning, security and best practices.
1. Check Your Credit Report (Identity Theft)
A free annual credit report is available for all three credit reporting bureaus[2]. Checking at least once yearly can tip a homeowner off to suspicious activity, such as identity theft, that can lead to home ownership scams. It may be wise to check more often, and several banks and lenders offer this service as part of credit card benefits.
2. Consider Home Title Insurance
There are two types of title insurance. The first type is lender insurance, which protects the mortgage company or bank during a home purchase. With lender insurance, if the house title is fraudulent or in a legal entanglement, the lender won't experience any losses. This insurance is usually required during a home sale.
The second type, owner's title insurance, protects the homeowner and is optional. It covers any liens against your home to help ensure you maintain ownership and the right to live in your home. This insurance protects against most types of deed fraud.
3. Track Your Mail
Losing a bill in the mail occasionally may not seem like a big deal, but frequent issues with your mail may indicate that someone is trying to use your information for crimes. Signing up for USPS Informed Delivery, a free service from the postal service, gives access to a daily digest of the items scanned at the post office and scheduled to be delivered that day. This ensures that if something doesn't make it to your mailbox, you know it. This is especially important for home-related mailings, like insurance, utilities, or mortgage paperwork.
4. Keep Tabs on New Scams
Real estate scams change all the time. To improve the odds of resisting a crime, reading the Federal Trade Commission's (FTC’s) website for the latest information on scams, including those involving real estate deeds, can be helpful[3]. Generally, it’s never wise to share personal or financial information over the phone or email, and this is especially true when responding to unsolicited calls from a lender or finance company. If something seems strange, go with your gut and avoid giving out information. You can always call the company directly and inquire about any issues.
It can be scary to think that someone now controls your home’s deed. Still, it’s best to take action immediately if you think you've become a victim. Start by notifying your home's mortgage lender to discuss your options.
Then, talk to the local police department. Share as much as you can about the scam, including dates and any supporting documentation. File a complaint with the FTC, as well. This information will be used to track your claim and also warn others about new types of crimes.
Next, if you learn of a new account or credit line, speak to the credit line issuer right away. Addressing each company directly will take time, but the best way to figure out what happened and how to fix it. Contact the three credit bureaus and freeze your credit history until the issue is resolved. You don’t know how much access the criminals have to other financial services. While you’re at it, change your login information to banking sites or other financial services, especially if you’ve reused any passwords.
Stolen Title Crimes Can Be Prevented
Whether you’ve lived in your home for a few months or decades, there’s still a risk that someone will try to steal your home or its equity by stealing the deed. Title crimes happen every year, but by knowing about them and keeping your financial info safe, you can avoid becoming one of the statistics.
Get additional tips and tools on the mortgage process from our mortgage center.
Sources:
[1] https://www.ic3.gov/Media/PDF/AnnualReport/2022_IC3Report.pdf
[2] https://www.annualcreditreport.com
[3] https://consumer.ftc.gov/scams
