Chances are you’ve seen online ads warning of identity thieves who will try to steal your home right out from under you. According to the ads, the only way to protect yourself is to purchase title lock insurance. With a home title lock in place, the story goes, thieves won’t be able to steal your house deed and leave you with nothing.
But do you really need this product? Bottom Line Personal attorney and scam expert Steven JJ Weisman says no. Here’s why…
The threat: Home title theft occurs when thieves forge a deed for your property using fake identification, false witnesses and sometimes corrupt notaries to transfer ownership to themselves. They then try to take out a loan against the equity in the house, get a mortgage or even sell the home out from under the owner. Seasonal rentals, vacation homes and vacant estates are frequently the targets.
Sounds scary, right? But the truth is deed theft is an exceedingly rare crime. In our country of more than 86 million homeowners, the FBI fields only about 20 deed theft complaints per year, putting risk for this crime on par with getting bitten by a shark.
Should I buy insurance just in case? No—this crime is highly unlikely to affect you. Even worse, the products sold as protection against this possibility do nothing to prevent it and little, if anything, to make you whole again afterward. All they do is monitor your deed and alert you after the crime has happened.
What to do instead: Many counties’ registrars of deeds offer free monitoring, so call that office and see if yours does and ask to sign up. That’s right…the very thing someone is trying to get you to pay for often is offered free by local governments.
If your county doesn’t offer free monitoring: Check in periodically with the registrar of deeds office to see if there has been any activity on your deed. You likely can do this online.
If you’re about to purchase a home: You may purchase homeowner’s title insurance. The bank will require title insurance to protect its interests, but for a small amount depending on the policy, you can add protection for yourself as well. Tell the closing attorney.
If you already own the home: You can contact the attorney who handled the closing and add homeowner’s title insurance. These policies are offered by established insurance companies, not the outfits that peddle “title lock” online. The insurance company will look out for signs of home title theft and can cover the costs associated with making things right in the rare event of a forgery.
What happens to people without insurance? Contrary to the online ads, victims of home title theft rarely end up empty-handed. Instead, they contest whatever transactions have been made and prove that the documents have been forged. It may be worthwhile to enlist the help of an attorney.
