There are many moving parts within the purchase of a home, and this becomes especially evident during closing. As a buyer, you will likely sit down with professionals to sign what appears to be an endless stack of papers. Among these forms is the deed to the property, which both the seller and the buyer must sign. Unfortunately, a scammer can forge a signature or otherwise change a deed to misrepresent who owns the property. This is called title fraud, and it can have very serious repercussions for the owners, from financial inconveniences to the possibility of losing the home entirely.
What Is A Title And How Can It Be Fraudulently Used?
A title is not a physical document, even though it is often presented as such. Instead, it is a concept representing who owns a property as conveyed by the deed which is the physical document that confirms this information. Your title gives you the permission to enjoy and control your property, as well as the right to own it and do what you like with it.
If someone tries to commit title fraud, they will do this by attempting to change the deed without your knowledge. For example, they may forge your name in order to try to sell the property to themselves, or they may try to take out a loan for themselves using your property as collateral. In this way, they secure money for themselves, but your property is on the hook for unpaid payments and other unwanted consequences.
Protecting Yourself Against Title Fraud
There are some steps you can take to reduce the chances of being targeted for title fraud or to reduce the impact if you do fall victim. When possible, avoid having the property be vacant, as it can appear to scammers that you are not giving the property attention, making your property and you easy targets. You may sign up for a title lock; however, this service does not preemptively protect you from fraud. Instead, it notifies you if any important information about your title has changed. It can be a valuable tool to keep you on top of potential forgeries, but you will still need to clean up the damage on your own.
It is also important that you regularly check your online records with the county to make sure that nothing has been filed that you were unaware about. If you get home-related documents in the mail, even if they do not have your name on them, be sure to review them for evidence of suspicious activity.
Using Title Insurance For The Most Protection
Although you can do your part to stop title fraud from progressing once it has occurred, one of the most effective ways of stopping fraud is to secure a title insurance policy. Title insurance offers broad protection not only against fraud, but also for other challenges such as undisclosed liens. You may purchase title insurance at any time, but it is most commonly part of your pre-closing requirements; your lender will want to see that you have title insurance so that their investment is protected.
If you do become a victim of title fraud, a title insurance policy will help to cover the costs of disputing and resolving the case. It will also shield you from claims on the property, such as from formerly unknown heirs. Title insurance is simple, you pay for it one time which then protects you for the duration that you own the home.
Be Sure To Check: Owner’s Policy Or Lender’s Policy?
One important detail to note about title insurance is that you should verify whether you have completed your application and secured this coverage. When buying a home, you may have already paid for title insurance and believe that you are protected. However, most lenders will require you to pay for their policy which will be listed on the closing documents. That policy will cover the lender for their investment in you and your property. The homeowner is not protected by the lender’s title insurance; if you want your own protection, you must secure an owner’s title insurance policy separately.
Trust The Experts To Help You Keep Your Home Secure
Title fraud can be an overwhelming event with immense consequences that can negatively impact your finances. The good news is that a little extra effort and a robust title insurance policy can provide considerable protection from the effects of title fraud. The experts at Mathis Title Company would be happy to help you with a customized policy that addresses all of your needs and risks. Contact our team to learn more about how title insurance can work for you, or to get started on a policy for your home to help prevent fraud as quickly as possible.