How to Protect Yourself Against Title Fraud: A Guide for Real Estate Agents and Homeowners

If you are interested in buying or selling property, you must protect yourself against title fraud.

Title fraud can have devastating consequences for anyone involved in the buying and selling process. There are steps you can take to prevent title fraud, and in this article, we’ll look at what title fraud is and how you can protect yourself.

What Is Title Fraud?

Title fraud is a type of identity theft. Often, the criminal has access to personal information such as Social Security numbers and birth dates. They use it to assume someone else's identity to create fake documents and transfer property ownership.

Ownership of the property can take out a mortgage, use it as collateral for other purchases or loans, or even sell the property without the rightful owner's consent or knowledge.

Fraudulent deeds are another way that criminals commit title fraud. These false deeds make it appear as though they are the rightful owner of a property. An error in public records is another opportunity for title fraud. In these cases, a discrepancy in official documents results in incorrect ownership information that criminals take advantage of.

Many times, a property owner won’t even be aware that title fraud has happened until their home is in foreclosure or they receive an eviction notice.

Who Is Most at Risk for Title Fraud?

Some groups are more vulnerable to title fraud than others. Common targets include:

• Victims of Identity Theft: If your personal information is compromised, criminals can use it to impersonate you in property transactions.
• Property Owners Without Loans: Without active mortgage records, paid-off properties attract less scrutiny, making them a target for fraud.

• Elderly Homeowners: Title fraud frequently targets seniors, particularly those living abroad or owning multiple properties.

• Owners of Vacant or Rental Properties: Properties that aren’t regularly occupied are easier to manipulate without immediate detection.

Signs of Title Fraud for Property Owners and Real Estate Agents

There are a few signs of title fraud on your properties that you should be aware of.

• Missing Bills: If you aren’t receiving utility or tax bills, it’s probably not a sign that you are lucky. This could indicate a change in your home’s ownership record, and you are a victim of fraud.

• Unknown Individuals Accessing Your Property: If people you don’t know or unexpected strangers are inspecting or even occupying your property, it may be a sign that the criminal has listed it and is attempting to sell it.

• Receiving Mail Addressed to Someone Else: If you receive mail with another name but your address, it could be a sign that you are a victim of fraudulent activity.

• Quick Sales Below Market Value: If you have a home where the seller is pushing for rapid sales of vacant properties at a steep discount, it could be a sign of fraud.

There are also signs of seller fraud for real estate agents. Keep these in mind as you work with new clients.

• Newly issued Identification: It is a strong signal of fraud when sellers provide identity documentation that is relatively new or issued in a very short period.

• Communication Methods: Sellers who communicate only via email or avoid direct conversations may be hiding their identity, another sign of fraud.

• Missing Proof of Ownership Documentation: If a seller is unwilling or unable to provide documentation like utility bills, home repairs or tax receipts, then it is likely that the seller is committing title fraud.

Real estate professionals can safeguard their clients by encouraging due diligence, verifying documentation and partnering with trusted title companies.

Tips for Preventing Title Fraud

While title fraud is a growing threat for homeowners and real estate agents across the country, there are several ways to protect yourself:

1. Keep Your Personal Information Secure

Be cautious about sharing personal information, especially your Social Security number. Try not to share it online or over the phone, unless it is necessary and you feel confident in the person or agency you are sharing it with.

2. Monitor Your Credit Report Regularly

One of the first signs of potential title fraud is unauthorized activity on your credit report. Make sure to check your credit report at least once a year. As you review your credit report, look for new accounts or loans that you don’t recognize.

3. Be Wary of Unsolicited Offers

Offers from an agency or person claiming they can help lower your mortgage payments or sell your home quickly can be an opening for title fraud. Offers like this may be a first step toward obtaining personal information that will help the criminal take control of your property.

4. Stay Informed About Your Property

Many areas have fraud alerts or property notices. Sign up for them if you can. Keep track of any changes made to your property, such as new liens or ownership documents. Contact your mortgage lender and local authorities immediately if any changes are made to your property documentation.

5. Review Before Signing Documents

Before you sign any documents related to your mortgage or property, make sure you fully understand what you are agreeing to. If something doesn’t seem right, take time to review the document with the help of a trusted advisor or attorney.

Protecting Yourself (and Your Property) from Title Fraud

It’s important to stay vigilant about potential scams because criminals are always looking for the easiest mark and the easiest opportunity. Every step you take to protect yourself makes it harder for criminals to target you.

That starts by working with a title company like Network Land Title Agency, one that you know and trust. Then, invest in a title insurance policy for your property. This provides protection against any future fraud or disputes related to the ownership of your property.

Remember, staying vigilant, working with agents and title agencies you trust, and taking proactive measures can greatly reduce the risk of estate fraud.