Has my house been stolen? Could I be evicted? Is all my equity taken?
Sounds like you’ve just heard one of the many TV and radio ads about home title theft.
Yes! They’re everywhere. It must be a major problem.
Hold on just a second. You can’t believe everything in an ad, especially when it uses fear to promote a product.
But it sounds serious. I want to protect my home, and I plan to use my equity for retirement.
Of course, that’s exactly what they want you to worry about. After all, they just happen to sell the answer to all those worries: home title theft insurance. What you should be asking though is: How big of a deal is home title theft? And, do I really need to pay for insurance to protect myself against it?
Are you suggesting this is all a bunch of hype?
As with most advertisements, there’s a kernel of truth to what’s said. But it’s still far from reality. Let me provide some perspective by answering your questions. That way, you’ll have a better understanding of home title theft and could potentially avoid wasting money on something you don’t need.
First, what exactly is home title theft?
Home title theft is a form of fraud, where a scammer fraudulently puts your name on a deed and files it with the county in your area, making it look like they’re the property owner. From there, the scammer could try to sell your home to an unsuspecting buyer, cash out your equity or take out a loan, using your home as collateral.
That sounds really bad.
So, how concerned should I be about home title theft?
Not very worried at all.
While anyone could fall victim to home title theft, it’s rare for a variety of different reasons. In fact, the name is somewhat misleading.
A scammer can easily search the web, find a blank deed form and then fill it in with information that is available through public records. But here’s the thing: while the scammer can file the deed in the records room of your county courthouse, it’s not a lawful claim.
So, forging a deed does not really mean someone has stolen the title of your home.
After all, the signature on the deed must be certified by a Notary Public, who is required by law to verify your identity.
And by law, only you can transfer your title to another party. It’s up to the potential buyer or lender to perform their due diligence on a property’s title. Should they enter into an agreement based on a forged deed, they are on the hook for any money given to the scammer – not you, as the legitimate property owner.
Well, that’s a relief! I feel bad for any conned buyers though.
Well, there is little to no chance that a scammer could get past the various safeguards in place by lenders, real estate agents and title companies. Just think of all the hurdles you had to go through – from credit reports and employment verifications, to tax returns and appraisals – to purchase your home. It’s highly likely any fraudulent title activity will be uncovered.
Plus, home buyers are almost always required to purchase title insurance. Title insurance protects buyers against defects in the title, including liens, fraud and forgery. Any respectable real estate agency won’t even let you buy a property without it. If the title company is duped by a forged title, then they must pay for any damages.
Got it. But I suppose it wouldn’t hurt to have an additional layer of protection, just to be safe.
Should I buy home title theft insurance then?
First, it’s important to know that a title protection service is not really insurance. That is, it does not protect you from a scammer fraudulently transferring your title.
Rather, home title theft insurance is essentially a deed monitoring service that occasionally checks to see if your title has been transferred out of your name. If it has, they notify you only after it has happened. They don’t help you resolve any issues created by a scammer.
Secondly, in most counties like those in your area, homeowners can check their title status/land records themselves online for free or sign up for a free county consumer text notification service. Since these title protection services provide information that is already free and readily available, they are not really worth it.
Plus, many banks and credit card companies provide alerts of changes to your credit report, which will alert you of any fraud, including if someone has stolen your identity and may try to forge a deed for your home.
You may want to be more worried about scammers posing as title protection services. As more companies try to scare people into paying for title protection, more scammers are also taking advantage of them. If someone’s emailing or calling you to get you to sign up for title protection, they could be trying to con you.
That makes a lot of sense. I guess it’s harder to know who to trust these days. Is there anything I should do?
One thing you can always do if you have concerns about your financial assets is to speak with a financial advisor. Other than that, remember to just ignore all the hype.
Unlike home title theft, long-term care insurance isn’t a scam. But it may not be the best option for funding your needs, if you need long-term care. For information on ways to cover the costs of long-term care, schedule a call with one of our financial advisors today.
The Retirement Group is not affiliated with nor endorsed by fidelity.com, netbenefits.fidelity.com, hewitt.com, resources.hewitt.com, access.att.com, ING Retirement, AT&T, Qwest, Chevron, Hughes, Northrop Grumman, Raytheon, ExxonMobil, Glaxosmithkline, Merck, Pfizer, Verizon, Bank of America, Alcatel-Lucent or by your employer. We are an independent financial advisory group that focuses on transition planning and lump sum distribution. Neither The Retirement Group or FSC Securities provide tax or legal advice. Please call our office at 800-900-5867 if you have additional questions or need help in the retirement planning process.
The Retirement Group is a Registered Investment Advisor not affiliated with FSC Securities and may be reached at www.theretirementgroup.com.