Dear clients and friends:
I hear that homeowners are having their titles stolen and have lost their homes to this thievery. Title theft warning services are being sold on TV to supposedly protect you from this practice when Lifelock, etc. won’t. Would having a mortgage on your home make this thievery less likely to occur?
I have seen these ads as well and wondered if they were a scam. So I did a little research. As it turns out they are not a scam but that doesn’t mean you need to pay for this service.
While a relatively rare problem, the bad guys can fraudulently sign your name on a new deed transferring your property to themselves. They record the new deed and instruct the county to send all future mail to a new address. By the time you notice that you are not getting mail for your property, the damage will have been done, such as mortgaging your property or selling it to a third party to cash out. It is actually very simple. Although, I think it may be harder for them to pull this off if you have a mortgage on your property.
The good news is that, at the end of the day, you can’t lose your property in this way. The bad news is that it is a hassle and big expense to get it back in your name. You see, you have to hire an attorney (not work we do) to bring what is called an “action to quiet title.” You used to have to buy a bond to start the action, but that was dispensed with several years ago. Eventually, you will get the title back in your name…..but what a pain!
So how can you avoid this hassle? Well, you could check your county’s deed records from time to time. This costs nothing. I suppose some people will have the time and energy to do this, but most won’t remember or want to bother.
Others can pay a monthly/annual fee to one of these deed anti-fraud companies that we all hear about. If this gives you peace of mind, then I don’t see any harm. But read the fine print. I haven’t done the research on all the companies, but understand that most of these companies simply send you an alert, they do not fix the problem if it gets too far. It is generally not insurance that will reimburse you for your loss or pay the legal fees you may have to incur.
Remember, this fraud exists but it is very rare.
I hope this helps.
Please forward this information to your friends and relatives.
As always, please send me your questions. If you are thinking about it, others are probably too, so my answers will no doubt help you and many others.
Let’s stay connected.
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