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Property fraud, mortgage fraud, and title fraud (a.k.a. house stealing) are becoming a big problem. So-called title lock insurance came into effect because of this growing area of fraud specifically targeting the elderly, or anyone else who may have equity in their property.
Here’s typically how the title fraud occurs:
- A fraudster does research to find a home with equity, which is the difference between the amount a property can sell for versus the remaining loan balance secured by a mortgage.
- A fraudster forges your name on a notarized “quit claim” deed, and files the document with county Recorder of Deeds Office. They may have been able to get a copy of your signature through an online public records database containing your own property deed or mortgage documents. A notary is supposed to verify who is executing a document, so sometimes, they may too be corrupted or involved in the crime.
- The Recorder of Deeds Office, seeing a properly executed document with all the required data, must file the document. Once the fraudulent deed is recorded, the fraudster is the owner of the home…on paper. It appears, to anyone looking in from the outside, that your home has been sold.
- The equity in your home is then used by the fraudster to take loans in your name.
- You find out the hard way…when you receive the first loan payment bill due in your name.
There are other variations of how a fraudster can take advantage of this issue, but generally, there is a document recorded at the Recorder of Deeds Office that creates the overall problem for the homeowner, whether that be a mortgage loan taken in your name, resale of your home to an unsuspecting party, or another scenario. Regardless, the homeowner is left with a mountain of problems to clean up after the dust has settled.
There are a lot of failures that occur throughout this entire process, from the notary to the Recorder of Deeds, to the banks giving the bad loans…but what if there were a service that could provide a notice to you if they happen to see this problem begin to occur?
In this post, I wanted to review such a service called title lock insurance that has received significant media attention over the past few years to help you understand the reasons why it may be something to consider, or not consider, based upon your personal situation.
It’s important to make the distinction between what title lock insurance is and what it is not. Title lock insurance is not insurance. Nobody, because of having this service, is going to help you restore your property. Additionally, unlike a credit report freeze, there is no “lock” that is ever placed on your property’s title, so the phase title lock protection can be a bit of a misnomer. Title lock insurance is simply a notification service that exists to monitor any transaction that may occur on your property record and subsequently, not proactively, inform you of the transaction.
Who is at risk for title fraud
Any homeowner can be at risk for title fraud, but specifically, the following groups should be extra vigilant:
- Seniors and the Elderly
- Homes with Equity
- Homes Owned Free and Clear
- Rental Homes
- Vacation Homes
What is Home Title Lock
The service is from a company called Home Title Lock. Home Title Lock is an alert and monitoring service. They monitor the title of your property if a document is recorded which may affect your property value or ownership status. Additionally, they provide a level of guidance in the event property fraud does occur. Finally, they provide a title history report when you enroll for their service.
Home Title Lock notifies you of any recorded documents against your property. This is a service that is not provided by banks, homeowners insurance companies, or identity theft protection subscriptions. Title insurance also will not help in this situation because title insurance only protects you from liens and conveyances on your property that existed prior to you settling on the home. As a result, you may be left to deal with any title fraud alone.
Is title lock necessary
There are billions of dollars in title fraud claims reported each year, while many others go unreported. In my opinion, title lock insurance programs are a “nice to have” layer of protection to ensure documents filed against your property with the Recorder of Deeds Office in your county are legitimate.
Is Home Title Lock necessary
For some, the Home Title Lock protection service may be necessary. For others, it may be a nice to have service.
Some counties, such as Bucks County, PA, may offer a fraud alert notification, making a notification from Home Title Lock unnecessary. You should check with your own county’s Recorder of Deeds Office to determine whether a similar service is available to you.
For those who do not have access to a county-based fraud alert notification, Home Title Lock may be a good solution if you are concerned about this type of fraud occurring on your home or the home of a loved one.
Is Home Title Lock legitimate
Yes, Home Title Lock is a legitimate notification service for whenever a change is made to your property’s title.
Is Home Title Lock a waste of money
If your county offers a similar service, then additionally paying for Home Title Lock, while it may add another level of protection, may be excessive. Otherwise, if you feel your concern is genuine, what price do you place on peace of mind? If Home Title Lock cost is less, then it may be worth investing into.
How much does Home Title Lock cost
Bottom line… is Home Title Lock worth it
Personally, I would want to find out about a fraud event as soon as possible. A notification that Home Title Lock provides would help in that endeavor. If you are concerned about title fraud, then this may be worth it to you.
If you’d like to work with Home Title Lock, please click here.