Home title theft

[Badger]

I keep seeing ads regarding insurance against home title theft. Is title fraud a real thing to be concerned about if you have your credit frozen?

Cheers!

 

[gauss]

I keep seeing ads regarding insurance against home title theft. Is title fraud a real thing to be concerned about if you have your credit frozen?

Cheers!

Somebody could attempt to file a fraudulent deed at the county recorder This would likely not be effected by any credit report freezes in effect by the owner.


A Recorder office around here lists the following:

What is Deed Fraud?
Deed fraud occurs when someone forges someone else's signature on a document transferring any interest in real estate. It also includes when someone transfers property they do not have a legal right or interest in. The forged document does not have to be recorded for forgery to occur

Forgery is a felony punishable by a maximum of 14 years in prison. If the forged document is recorded at the Register of Deeds and/or presented as true to anyone, the person recording or presenting the document also may be charged with the felonies of Uttering and Publishing and/or Recording a Fraudulent Conveyance - both punishable by a maximum of 14 years in prison

I suspect a court of law could reverse any fradulent deeds recorded that effect you.

In the mean time, I suspect it is not a bad idea to learn to use any online tools that are offered by your local Recorder to check the status of your property. This could avoid unpleasant eviction/trespassing notices being posted on your front door or locksmiths, hired by the fraudulent "owner", changing the locks on your house.

This could get potentially very ugly if someone purchases your house from the fraudulent "owner" for cash and truly believes that they own the house since they paid for it.

Probably a larger issue in low value/low income housing neighborhoods where someone is trying to make a fast buck.

I assume the insurance being peddled in the OP's advertisement would not assign much payout value due to the emotional distress related to this which IMHO would be the biggest cost/downside risk.

-gauss

 

[phil1ben]

Gauss above stated, "This could get potentially very ugly if someone purchases your house from the fraudulent "owner" for cash and truly believes that they own the house since they paid for it."

Such an innocent purchaser would not be a "good faith purchaser for value" because they did not take the routine step of inspecting the house to protect themselves because the real owner is still living there.

This would be easily resolved by a court.

However, one needs to ask themselves how many "innocent people" would buy a home without looking at it?

 

[donheff]

Interestingly, a friend of mine just bought a waterfront house in Annapolis without visiting. I was stunned. Who would do such a thing? Then, yesterday I read an article about a Redfin study that shows 32% of offers in DC are made without a visit and even more nationwide. Go figure.

 

[Jerry1]

Interestingly, a friend of mine just bought a waterfront house in Annapolis without visiting. I was stunned. Who would do such a thing? Then, yesterday I read an article about a Redfin study that shows 32% of offers in DC are made without a visit and even more nationwide. Go figure.

Buying it I without seeing it I can understand. But buying it without title insurance? That seems hard to believe. Further, even though the property was not viewed personally, isn't some third party viewing the property? Even if just a local licensed realtor?

I'm sure it would be a pain if it happened, but I'll skip the insurance as I don't think it likely either to happen or lose in court if it were to happen. I get a tax bill sent here twice a year with my name on it. If that were to ever stop, I'd check into it immediately. Kind of like credit monitoring.

 

[CaliKid]

I think bigger issue of deed fraud is someone getting a loan against it, no!? I worry about this. Not like I lose sleep but I think about it at least.

 

[flintnational]

I think the real risk to the owner is having to clean up the mess. I do not think you would be at risk of foreclosure or losing the house because of title fraud. The risk should fall to the buyer or bank that did not verify the title. Buyers should be purchasing title insurance which protects against title problems and includes a title search to verify authenticity. (I assume title searches and title insurance are universal in all States?)

 

[skipro33]

Do you think if the home's title is listed as a trust, not an individual, it would make it less susceptible to this type of fraud?

 

[jazz4cash]

I think bigger issue of deed fraud is someone getting a loan against it, no!? I worry about this. Not like I lose sleep but I think about it at least.

This is what I was thinking also, and presumably paid off properties might be more susceptible? There's a radio ad running locally that claims "everything a fraudster needs to steal your deed is available online". The ad implies that the homeowners doesn't know until they get notified that their "loan" is delinquent. They're selling a service called "title lock", I believe.

 

[Scuba]

Anytime we’ve refinanced our home, the bank has sent out an appraiser who personally visited our property.

 

[jfn111]

An article on one type of deed theft
https://www.nytimes.com/2015/11/08/...eme-to-defraud-owners-out-of-their-homes.html

"Deed thieves often scan legal notices for mortgages in arrears, typically targeting properties like Ms. Campbell’s that are in poor repair or abandoned. Vulnerable homeowners — including older and disabled adults — are sometimes tricked into signing over their properties, while believing they are getting financial relief.

In other cases, signatures are simply forged on deeds. The thieves, meanwhile, hide behind inscrutable mazes of limited liability companies, rented post office boxes and fake addresses."

 

[gauss]

Buying it I without seeing it I can understand. But buying it without title insurance? That seems hard to believe. Further, even though the property was not viewed personally, isn't some third party viewing the property? Even if just a local licensed realtor?

Lenders will typically require title insurance that will protect them in a mortgage transaction. Owner's title insurance is optional.

I could see myself purchasing real estate without shelling out for owners title insurance. Of course I would run a title search to see if there is any documented issues in the way of "clear title" on file and would also get the seller to sign a statement acknowledging that there are no other unknown (ie recent) liens.

I guess I would qualify that I might only use this strategy if the seller has "roots" in the community (ie other real estate etc.), and that the purchase price is a small fraction of my net worth (ie < 10%).

I have basically thought about this in the context of acquiring rental property.

-gauss

 

[Freedom56]

I keep seeing ads regarding insurance against home title theft. Is title fraud a real thing to be concerned about if you have your credit frozen?

Cheers!

The records office normally notifies you of any changes. However if your are concerned you can periodically check yourself online for free in most counties to see if there are any changes to your property.

You can use this site to navigate to you state and county:

https://publicrecords.netronline.com/


For Los Angeles County, I use:

https://losangeles.netronline.com/la-index.php

For Palm Beach County, I use:

http://oris.co.palm-beach.fl.us/or_web1/or_sch_1.asp


Hope it helps!

 

[NYEXPAT]

I imagine Overstock's blockchain project with Hernando De Soto will eliminate this risk.

 

[Sunset]

Here is an example:

Family returns home from living away to find that squatters bought their house for $5,000 | Daily Mail Online

 

[Walt34]

I think the real risk to the owner is having to clean up the mess. I do not think you would be at risk of foreclosure or losing the house because of title fraud. The risk should fall to the buyer or bank that did not verify the title.

When I was working in the Fraud Section we did occasionally get phone calls from people who received foreclosure notices on paid-for homes. In this case the bank who made the loan is in fact the victim because they're the ones who will take the financial loss. But it is a PITA for the homeowner to deal with.

This is one of those cases where paying an attorney a couple hundred to send nastygrams to the bank on legal letterhead may well be worthwhile simply to save oneself the aggravation.

 

[jazz4cash]

I just realized I can't recall any reference to title insurance for a 2nd mortgage. Based on a quickie google search that seems to be accurate. Maybe the subordination eliminates the need for a title policy but in the case of a paid off home it seems to open the door for fraud.

 

[Jerry1]

Update

I thought I’d update this thread instead of starting a new one. Recently I did a quit claim deed to transfer some property to my daughter. In waiting for the deed to get recorded, I checked the county web site to see if there was activity. In that process, I noticed that the county has a notification process for when there is activity. You give them your name and email address and if they record something, you get an email.

I signed up and also continued to check the county web site. Sure enough, the day the quit claim deed was recorded, I got an email. Not exactly title theft insurance but seems pretty effective to me.

Anyway, just thought I’d let folks know, that it’s likely possible to check your activity on a county web site and, they may even have a notification program.

 

[ExFlyBoy5]

I thought I’d update this thread instead of starting a new one. Recently I did a quit claim deed to transfer some property to my daughter. In waiting for the deed to get recorded, I checked the county web site to see if there was activity. In that process, I noticed that the county has a notification process for when there is activity. You give them your name and email address and if they record something, you get an email.

I signed up and also continued to check the county web site. Sure enough, the day the quit claim deed was recorded, I got an email. Not exactly title theft insurance but seems pretty effective to me.

Anyway, just thought I’d let folks know, that it’s likely possible to check your activity on a county web site and, they may even have a notification program.

That's pretty good info, really. The OP had me having law school flashbacks to property law.

Speaking of which, one of the more famous SCOTUS holdings about property was that of eminent domain (Keto v. City of New London 2005) where basically the court held that land could be taken from one private individual to another under the Takings Clause to "further economic development". The ruling allowed an entire neighborhood to be razed for a development that...wait for it...never came to fruition.