We live in a world where information is constantly at our fingertips. Almost anything you wish to know can be found on the internet with just a few keywords typed into a search engine. Although this makes our lives easier, it also allows for personal information to be tracked and at times even stolen. With identity theft on the rise, Title and Closing Fraud have become increasingly prevalent issues in the real estate industry and title agents must be more diligent now than ever in fighting fraud.
When and how does Title Fraud happen?
When a deed transferring ownership of property is recorded, that documentation becomes public record and can be searched by any interested party. Someone can then use this information to obtain false identification to impersonate the true owner, and ultimately obtain a property through a fraudulent transfer document. According to the Federal Bureau of Investigation, “Home Stealing” tends to happen often when properties have recently had a deceased owner, or with rental and vacation homes that are vacant for long periods of time.
Another occurrence in which title agents must be on the lookout for potential fraud is when a “Dollar Deed” is issued. There are many reasons a deed like this is recorded but fraud can occur in these instances when someone owns property and is about to face financial hardship or an impending lien on his or her property. If the owner deeds the property to another individual for a dollar in order to remove their name from the record so that the judgment or lien does not attach in the transfer, that would be considered a fraudulent deed. This kind of fraud could cause more time in the title clearance and closing process. Buying an owner’s policy can protect against this kind of fraud.
Ways to avoid falling victim to Title Fraud:
1.) Purchase title insurance: We at Investment Title highly recommend owner’s title insurance, to protect you from any harm caused by any defects on the title.
2.) Use reputable professionals when purchasing property: Purchase property using a licensed and trusted real estate agent who can help guide you through the home buying process. Research the recommended Attorney and Title Agency if recommended by the realtor.
3.) Check the status of your title and liens: Most county clerks provide access to check the status of your real estate investment online allowing you to regularly check if any changes have been made to your deed. Some counties even offer email alert notifications that you can sign up for via your local county website. You can also contact your trusted title agency to do a present owner search that will pull a copy of the current deed, liens, and judgments.
Having the knowledge to spot fraud before it happens, can make a huge difference in protecting yourself and your property when selling or buying a home. When in doubt, it is best to research and let your Investment Title team answer your questions before making any major decisions. We hope this information was helpful to you, please reach out to our team with any questions regarding title insurance and to let us make the closing process less stress full.