According to the FBI, there were more than 11,000 reported cases of real estate fraud in 2021, resulting in $350 million of financial losses. Property title fraud was just one of these crimes. This scam happens when a fraudster steals your personal information and transfers the deeds of one of your real estate assets into their name. Then, they might sell your property or use it as equity when applying for credit. It can have devastating consequences. Here are most common scams involving property titles and the red flags to watch for to help you prevent it.
Types of Property Title Fraud
There are two main ways scammers commit this kind of fraud:
A scammer can steal a property by acquiring the homeowner's identity. That might involve multiple steps, such as swiping someone's bank cards, retrieving private records from their trash can, or asking them to reveal personal information via email, social media, and text – also known as phishing. Once the scammer has enough information about the homeowner, they can apply for other documents in their name, such as a fake ID and Social Security card, and pretend to be them.
Fake Bill of Sale
With a fake identity, it's easy for a scammer to create a fraudulent bill of sale – the document that details a transfer of property deeds from one person to another. This paperwork requires a signature from the homeowner, but a con artist can easily forge the document if they have enough information after stealing an identity. They don't even need the original deeds to commit this crime. The scammer can then submit the phony bill of sale to the court and legally gain property ownership.
Property Title Fraud Red Flags
There are a couple of warning signs that a scammer might be attempting to steal your property.
Someone Asks You for Information About Your Property
If someone contacts you about your real estate investment, either online or in person, be suspicious. A scammer might want to know how long you've had your property and whether you have a mortgage. Even if it's just an innocent conversation, don't reveal personal information about your finances to anyone you don't know.
Someone Asks to Visit Your Property
Be wary of anyone who asks to visit a property in person but won't provide personal details or identity. Someone might make up a fake story to get more details about your property so they can carry out fraud. Confirm the identity of anyone asking for property details or who asks to visit a listing in person.
Protect Yourself Against Property Title Fraud
Reporting missing mail, contacting your county's deeds office, and checking your credit report are three ways to protect against property title fraud.
Report Missing Mail
If bills, bank statements, and other documents don't turn up at your real estate asset, someone could be stealing your letters and collecting personal information. Contact the USPIS' Postal Inspection Service to track down thieves and ask your financial institutions to send you online correspondence instead of physical mail.
Contact Your County's Deeds Office Regularly
The deeds office in your county keeps information about your property, including details about ownership transfers. Check the information the county holds regularly and contact the police if you believe someone is trying to steal your investment.
Check Your Credit Report
As mentioned, the first step of property title fraud is identity theft. Check your credit report often to see whether anyone has applied for finance in your name, and place a fraud alert on your file if you believe someone is using your information. You can view your credit report for free with several providers.
Benefits of Monitoring Your Property Title
Title monitoring services let you check the status of your property title and receive notifications if someone files a bill of sale with the county, providing peace of mind. You can also discover if a fraudster makes changes to your other property records.
The best title monitoring services also help you protect your identity by scanning the dark web for exposed records and alerting you if someone checks your credit report.
Title Insurance and Fraud Protection
As you can imagine, a stolen property title can cause enormous financial loss. Not only can you lose your investment but you'll need to pay thousands of dollars in legal fees to try and get it back.
Title insurance can help mitigate these losses. It provides a financial safeguard if someone transfers your deeds into their name. You can recover the costs of disputing home ownership, including court fees.
Following the steps listed above can prevent fraud of property titles from happening or help you recover financial losses if someone steals one of your investments. Be proactive and safeguard your real estate assets from criminals.
You should also work with a professional land consultant when you buy or sell land. They have the expertise and land specific education to successfully guide you through the transaction process.