Deed fraud protection: Everything you need to know

What is deed fraud?

Deed fraud, also known as home title fraud, is when criminals take the deed to a home via forgery or fraud without the homeowner’s knowledge.

Deed fraud can happen in two ways:

• Forgery: Criminals forge a homeowner’s signature on a deed and then file it with the county clerk to transfer ownership.
• Fraud: A thief persuades a homeowner to sign their deed over without understanding what they are signing. The thief may make false promises and claim to be helping a homeowner.

Once the deed is transferred to the thief’s name, they can take out a mortgage, sell the property, or rent it out. Home title theft, or deed fraud, is a form of property theft, though it can sometimes involve identity theft if the thief uses stolen personal information to carry out the fraud.

How does deed fraud work?

Deed fraud typically involves a criminal targeting a potential home and forging the homeowner’s signature or creating fake documents so they can “sell” it to themselves. It also involves a fraudulent transfer of property ownership, after which the criminal can do various things, including selling the home, renting it out, or taking out a mortgage.

Here’s how it happens: A thief forges a homeowner’s signature and then “sells” it to themselves. Then, the thief registers the sale at the county recorder’s office with fraudulent identification and an inauthentic notary signature.

After they “steal” the home on paper, they can legally do whatever they want with it — even sell it to new buyers. This fraud often occurs at homeowners’ secondary homes, such as vacation houses, where they aren’t home to notice red flags.

Shielding personal information is a form of protection against a fraudulent deed. Criminals can access personal data in numerous ways, including dumpster diving attacks, phishing, and malware.

Signs of deed fraud

Deed fraud can creep up on you slowly and catch you unawares, but you can set up indicators or warning signals to alert you that something is wrong. Here are the warning signs that you may be a victim of deed fraud:

Unexpected bills or notices

Are you noticing new bills in your mailbox? Or have you started receiving bills with missing payments? If you’ve been paying your bills on time and are beginning to get notices that invoices are going unpaid, or you’re getting surprise bills for a vacant property, you may be a victim of deed fraud.

Missing mail

Have you stopped receiving your regular mail? A scammer may have changed your address to intercept your mail and steal your personal information, which they can use to steal your property.

Unfamiliar documents

If you start receiving letters or statements about mortgages or loans you didn’t apply for, it’s a massive red flag that scammers may have taken out a mortgage using your property as collateral.

Title or mortgage alerts

Homeowners can receive alerts for house titles or mortgages from various entities, including a third party that protects against deed fraud or from their county recorder’s office. Sign up for alerts to be notified immediately of any changes and stay on top of potential deed fraud.

Rental agreements

If someone you’ve never met claims to have a rental agreement for your home, it may be a scam where criminals use your name and personal information to run scams or an indicator of deed fraud.

Foreclosure notices

If you receive foreclosure notices or warnings, it’s a giant red flag that scammers have stolen your home deed and are using it to secure loans.

Changes in public records

Ask your county clerk’s office if you can receive alerts when changes occur in public records related to your home. Another option is to visit the county clerk’s office and manually check new entries or name changes.

What actions can criminals take with your home title?

Once scammers have sunk their claws into your property and acquired the deed, they can do almost anything. Criminals can make money using stolen deeds in many ways, including:

• Renting out your property illegally to make rental income.
• Refinancing your home to steal the equity without selling the property.
• Opening lines of credit, like a home equity line of credit (HELOC).
• Selling your property to an unsuspecting buyer.

What to do if you become a victim of deed fraud

If you’ve become a victim of deed theft, you can take a few steps to regain control of your property and protect your rights.

1. Contact the companies where fraud has occurred, such as the title insurance company, the bank, or the utility company.
2. Set up a fraud alert with your creditors and review a fraud victims checklist.
3. Request a copy of your credit report to examine it and set up credit and fraud surveillance.
4. Contact the FTC at www.reportfraud.ftc.gov to report deed fraud
5. Call or visit the county clerk where property fraud occurred.
6. Reach out to your local police department to file an identity theft report.
7. Update your passwords and set up two-factor authentication to protect against identity theft.
8. Find a reliable company that offers identity theft protection.

How can you protect yourself from deed fraud?

Deed fraud is rarer than other types of scams, but various forms of protection against a forged deed exist. Here are the best ways to prevent deed theft:

Monitor incoming bills

Your inbox is typically the first place where signs of identity theft appear. Instead of putting mail you don’t immediately recognize in the trash, be sure to read it first. Check your bills, like credit card and utility bills, for errors, and keep your eyes open for bills or invoices from utility or mortgage companies you don’t recognize.

Check if you have a title insurance policy

Home title insurance is a standard policy required for a real estate purchase. After closing a sale, title insurance policies protect buyers and lenders from conflicts over the home’s title. What does this look like? If a scammer forges the deed to the house you live in and the real owners show up, this type of insurance protects you against any damages. Home title insurance is not the same as home monitoring, which provides a service that indicates any future changes in a home’s title.

Regularly review your credit reports for identity theft

Monitor your credit reports. If you notice anything strange, like applications you didn’t submit or inquiries about your credit score, you may be a victim of identity theft. Credit monitoring services do this for a fee and can alert you to signs of fraud if you don’t have time to check your credit reports.

Review public records and property history before purchasing

When purchasing a new property, you can browse the property history before purchasing to ensure you’re not involved in deed fraud from someone else’s property. Another way to prevent deed fraud is to review your property records and home title at your local public records offices. Check for suspicious activities or documents included in the record, such as an unknown name or forged signature.

Regularly check your mailbox

Criminals love to pillage mailboxes for personal information. It’s the easiest way for them to get hold of your sensitive information. Check your mailbox daily to prevent others from getting ahold of your personal information. If you’re going away on holiday, find a way to prevent sensitive data from sitting in your mailbox. Ask a trusted friend or family member to pick up your mail, have it forwarded, or ask the postal office to hold your mail.