As people go about their daily lives in their homes, they rarely stop to consider that someone could be actively attempting to steal that home from them. Home title fraud is more common than you may think, and if someone succeeds in committing fraud or theft with your title, it could bring the end of your right to own and live in the home.
For several reasons this could end up costing you significant money—both in court if you choose to legally fight the fraud or on the market by purchasing a new house. Here is what you need to know about title fraud and what you should do if it happens to you.
What Is a Fraudulent Title and How Does It Impact You?
A fraudulent title is one that has been tampered with or is otherwise not authentic or accurate. Acquiring a fraudulent title can happen in a variety of ways; sometimes, a person will attempt the fraud once you have purchased a home, and other times they might try to sell a home to you that already has a fraudulent title in order to gain your money without giving you legal ownership of the property.
No matter what type of fraud occurs, it is highly problematic for the party who is intending to purchase and live in or use the property. You may lose the home and any equity you have put into it.
Signs That Fraudulent Behavior Has Occurred
Spotting fraudulent behavior requires a little bit of vigilance, but some telltale signs can give away suspicious activity. One of the most notable indicators that something could be amiss is a change in your bills or mail. If you notice that bills have stopped coming or that automatic payments are being missed, someone could have changed the information on the account.
This might indicate that, for example, your bills are going to the new owner of your home—the person who committed fraud. It could also signal that they are making it more difficult for entities to contact you, so that you may not become aware of a foreclosure or other action until it is too late.
Also, be sure to check your credit. If a mortgage or home equity line of credit has been taken out against your home, the person doing so is most likely not making payments on the loan. These will show as late or missed on your credit report.
What to Do If You Suspect Fraud or Theft
If you suspect that someone has stolen your title or committed fraud, either with your existing deed or as you are about to purchase a new home, the Federal Trade Commission wants to hear about it. Call any involved companies, including your mortgage issuer, and let them know what is happening.
Next, set up a fraud alert with the credit bureaus and acquire copies of your credit report; you may need them later as evidence. You can make a report directly to the FTC using their online form, but you should also file documentation of the incident with your local police.
What Title Insurance Does for You
Title fraud can significantly impact your life and financial wellbeing, but the good news is that you can take proactive steps to avoid it. Title insurance protects against many of the common types of fraud, such as forgery. Therefore, it is wise to invest in title insurance early in your home ownership journey as most commonly, this happens during closing.
As an added benefit, title insurance does not work in the same way as other types of insurance policies. Instead of paying monthly, you simply pay a lump sum up front, usually calculated as a percentage of your home’s total value. Once you pay this lump sum, you are protected by title insurance for the entire time that you own that property.
Stay vigilant and be sure to investigate any suspicious activity around your bills, automatic payments, credit reports and more. If you notice anything that seems out of place, contact your title insurance agency as soon as possible. They can assist you with delving deeper into the issue and guiding you on what to do next to avoid losing your home.
Trust the Pros to Help You Protect Your Home for the Long Term
Whether you have already lived in your home for some time, or you are just now reaching the closing stage of a new property purchase, do not neglect title insurance. The experts at Mathis Title Company can help you to understand your options and decide on the title insurance coverage that is right for you. Contact Mathis Title Company to learn more or to schedule an appointment to get started.