Home title fraud can affect anyone who has purchased a home. Understanding risks of title fraud and what can be done to prevent it from occurring can help homeowners protect their investment. This review discusses what constitutes home title fraud, what risks title fraud presents for home buyers, and most importantly, how homeowners can protect themselves from title fraud.
What Is Home Title Fraud?
A home title denotes who has legal ownership of a particular property and is usually in the form of a deed. Home title fraud, also called deed fraud, occurs when the title to your home is stolen and is a form of identity theft.
A criminal may commit home title fraud by forging the deed and submitting it to allow for the illegal transfer of ownership. From this point, the fraudster may sell the home’s title and subsequently the property itself. Fraud can also be perpetuated by refinancing the loan, taking the proceeds and allowing the loan to expire, which causes the home to fall into foreclosure.
What Happens When Home Title Fraud Occurs?
The most obvious risk of home title fraud is the potential loss of your property. However, there are other complications title fraud and theft may cause, such as the incurred legal battles, litigation, financial loss, delayed closing times and emotional stress placed upon the title owner and their family.
Loss Of Property
Title fraud can lead to the loss of your property. Many victims of title fraud are unaware their title has been stolen; in the meantime, the thief may sell the title, refinance or allow your home to enter foreclosure. In the worst-case scenario, you could find yourself temporarily or permanently no longer in possession of your home.
Legal Battles and Litigation
Of course, you have the option to fight the theft and regain ownership of your property. However, this will likely involve a lengthy and costly legal battle. Any matter being resolved in the court system may also require multiple court appearances.
The loss of your home’s title due to fraud could certainly create a negative financial impact. This may include costs associated with hiring an attorney, costs for filing motions with the courts and possibly displacement costs for temporary housing. There may be costs associated with repairing any damages that occur to your home as a result of the fraud.
Issues with your home title could lead to major delays when you attempt to close the sale of your home. This can lead to major frustration for yourself, the buyer, the title company, and everyone else involved in the sale process.
One of the most unfortunate risks of title fraud is the amount of stress it can place upon homeowners and their families. The financial and legal strain it causes leads far too many to feel overwhelmed. The process can also take time to resolve, which leads to a fair amount of stress over a long period of time.
How Title Services Helps Protect Against Home Title Fraud
Of course, the best method is to prevent fraud from happening in the first place. The good news is that you can also protect yourself by taking certain precautionary steps. Most notably, you can help prevent title fraud from occurring (or causing complications) by working with a title company that monitors your title and promptly notifies you of any suspicious activity and also takes action if there are any instances of potential fraud or theft.
Additionally, title insurance helps protect you from financial loss in the event title fraud does occur. For example, title insurance may cover legal costs associated with challenging the possession of your title in court.
The Different Types Of Title Services To Protect Against Title Concerns
Title insurance is a great way to protect yourself from financial responsibility related to title fraud against you and reduce your overall risk. Notably, title insurance is recommended for title owners who are at a higher risk of fraud (i.e. individuals who own multiple titles) and those who are going through a real estate transaction. Title services are recommended for buyers, sellers, lenders and real estate agents who need to reduce their overall risk.
There are additional services to consider for further protection from title fraud and other title-related concerns. The services you need depend on your situation. For example, you may need legal title services if you are dealing with mechanics liens related to an unpaid contractor who performed remodeling work on your home. You may also need title services if you are refinancing or have property that is vacant for periods at a time.
Mathis Title Company Provides Reliable Home Title Services
Mathis Title Company offers title company services and legal services for buyers, sellers, lenders and real estate agents. We also provide consultancy and advisory services. If you have questions, concerns, want to learn more or get started, contact us today by phone at 703-214-4020 or schedule an appointment online.