Can Someone Steal Your House Without You Knowing?
Criminals can steal the deed to your house (without you knowing) in a devastating scam known as home title theft, or deed fraud.
House theft is a growing problem, with multiple reports of deed fraud occurring across the United States last year.
So how do criminals get away with stealing homes? Here’s one example.
In Detroit, 65-year-old June Walker was thrilled to buy her home after two hard years of saving everything she could from her disability checks. But just two months later, she received an eviction letter [*].
It turns out, her “property manager” had created a fraudulent deed and was pocketing her monthly payments.
Sadly, deed fraud can happen to anyone. We'll also review the warning signs of identity theft which covers everything you need to protect your home.
What is Deed Fraud?
Deed fraud — also called home title fraud, title theft, or house stealing — is the illegal transfer and recording of a real estate title without the knowledge or consent of the legal owner.
Criminals often target vacant properties — such as vacation homes — especially if the legal owner is deceased. In some cases, the scammer will live in the home. But it’s more common for them to rent it out illegally or even sell it and pocket the money.
How Can Someone Steal The Deed to Your House?
Deed fraud is most common in rundown homes or dilapidated sections of town. If the owner of a property dies and the family members don’t promptly take over the deeds, criminals can swoop in.
So how do they “steal” the home?
Deed fraud is a type of identity theft. A criminal identifies a potential home to target and then forges the true owner’s signature on the deed as they “sell” it to themselves.
When they register the sale at the county recorder’s office, they’ll either use fraudulent identification, a counterfeit notary signature, or even work with an unethical registered notary to pull off the scam.
After taking ownership of the property, they’re free to do whatever they want — even sell it to a legitimate buyer.
Some thieves will transfer the deed to a fictitious name or shell company before changing it to their actual name. This makes it seem like they were a legitimate buyer after the initial crime took place.
What Can a Criminal Do With Your Home Title?
At first, deed fraud doesn't really seem like theft. But criminals can make money from a forged deed in several ways:
- Illegally rent out the property and take regular monthly payments from unsuspecting tenants. They could also put the home up as “rent-to-own” so the tenant believes they’re paying off their home when really the scammer is just taking their money.
- Open a home equity line of credit (HELOC) in the victim’s name. This type of loan fraud enables the thief to take out equity against the victim’s home (and not make loan payments!)
- Sell the home to a legitimate buyer and pocket the profit. This is a common approach for unoccupied vacation homes or rental properties.
- Refinance the mortgage to cash out the equity (known as a reverse mortgage scam). Quite often, this crime leaves the family without a home. Worse still, the bank or mortgage lender will put a lien on the property, which could result in foreclosure.
In the case of refinancing, sometimes the thief is someone with considerable influence over the family members. For example, a “family friend” might convince seniors or vulnerable family members to refinance their homes.
In this scenario, it's even more challenging for the victim to get the home back, especially if the thief quickly transfers the deeds to a third party.
📚 Related: Is Home Title Theft Real? 5 Ways To Protect Yourself →
How To Protect Your Home Against Deed Fraud
Scammers who commit home title fraud need access to your personal information.
The best type of deed fraud protection is to keep your identity secure and safe from criminals.
Unfortunately, as more of our lives move online, there’s a higher risk that our sensitive information can be stolen and used to create fraudulent documents. Due to the volume of recent data breaches, your information might even already be available to hackers on the Dark Web.
Older people are common targets because they often have more equity in their homes, and they might not be tech-savvy or aware of the dangers online.
Here are four action steps you can take to prevent deed fraud:
Pay attention to incoming bills
Sometimes, thieves will change the address on bills to keep their crime hidden, giving them more time to make money from the property. This is called a change-of-address scam.
Keep a close eye out for mortgage bills, tax bills, and water bills.
If you’re looking out for older family members, make a note of when they receive bills each month and check to make sure the bills continue arriving.
Check the status of your property deed
Anyone can check local registries or the county recorder’s office for land records and property deeds online in the United States.
Try to check your deed's status on a regular basis to make sure no one is trying to take over your ownership rights. Or better yet, set up notifications at the registry to alert you to any changes.
📚 Related: The 5 Best Home Title Protection Services in 2023 →
Monitor your credit reports for signs of identity theft
Most people only look at their credit reports when they’re applying for a mortgage or loan. However, if you want to avoid becoming the victim of deed fraud, you should be more vigilant.
At a minimum, take advantage of your yearly free credit report at AnnualCreditReport.com. This gives you a full credit score across the three major credit reporting agencies — Equifax, TransUnion, and Experian.
Did you know? An identity theft protection service like Aura can monitor your credit and statements for you and alert you to any signs of fraud.
Aura’s fraud detection is up to 4X faster than other credit monitoring services, so you’ll be able to stop fraud before it’s too late. Try Aura’s 14-day free trial for immediate protection while you’re most vulnerable.
📚 Related: How Do I Stop Someone From Using My Address? →
Check public records and property history before buying
We all love a good deal. And it’s surprisingly easy for thieves to lure homebuyers into a quick sale. (The same way car thieves can scam you into a quick sale through car title scams.)
If you're considering buying a vacant property, do your due diligence. Research public records about the property history to study previous title transfers — especially any quitclaim deeds.
Also, ensure your lawyer completes a thorough check on the current property owner and verifies multiple forms of identification before closing the deal.
📚 Related: Someone Bought a Car in My Name! What Should I Do? →
Consider an owner’s title insurance policy
Even when you take the precautions above, it’s possible to be duped by an experienced scammer. You may want to add an extra layer of defense to your property deed by buying an owner’s title insurance policy.
This service locks your home title, which gives you greater protection against deed fraud. It might even cover any costs involved if you are targeted.
However, it's important to be equally diligent when buying a title insurance policy, as scammers can pose as these companies, too.
Every Aura account includes home title and address monitoring. This means we automatically monitor your home title and alert you if anyone tries to change it without your permission.
With Aura, you also get:
- Credit lock: Secure your credit from unwanted inquiries by locking your credit with Experian.
- Credit scores & reports: Keep track of your credit history with monthly credit updates and annual reports from the major credit bureaus.
- Financial transaction monitoring: Link your bank accounts and set alerts on spending activity to help detect the warning signs of fraud.
- Bank account monitoring: Get alerted if someone tries to add more account holders or remove your name from an existing bank account.
- Lost wallet remediation: If your wallet is lost or stolen, we’ll help you cancel any debit or credit cards and work with you on a recovery plan to secure your sensitive information.
- $1 Million identity theft insurance: Every Aura plan comes with an insurance policy that covers eligible losses due to identity theft.
📚 Related: Is Identity Theft Protection Really Worth It? →
3 Signs You’re the Victim of Deed Theft
You might think you can protect your own home without any worry. But with senior citizen scams on the rise, your vulnerable parents or grandparents may lose their homes without knowing.
If you think your home or a loved one’s home is at risk, look for these warning signs:
- There are unpaid bills. If you find a stack of red-letter bills from utility companies at your vacant property, this could be a clear sign of deed theft.
- Signs of life at a vacant property. If you arrive at your vacation home or a deceased parent’s old house to find evidence that someone has been there, it could indicate home title fraud.
- Notice of foreclosure. If you or a family member receives a notice of foreclosure from the bank when you don’t even have a mortgage, this is a serious red flag that should be addressed immediately.
What Happens If Someone Steals The Deed to Your House?
- Call all the companies where you believe fraud has occurred, such as your utility company, bank, or title insurance company.
- Place a fraud alert with your creditors and follow the steps of the fraud victim's checklist.
- Request your credit reports so that you can analyze your records or set up credit and fraud monitoring.
- Report identity theft to the FTC at www.reportfraud.ftc.gov.
- Notify the county clerk of the property fraud.
- File an identity theft report with the local police department.
- Change all your online passwords, set up 2FA, and follow other steps to protect yourself from further identity fraud.
- Sign up for family identity theft protection.
Acting fast is crucial if you think you've fallen victim to any fraud. Take action as soon as you notice something suspicious before criminals can do too much damage.
The Bottom Line: Turn Your Home Into a Fortress
Deed fraud is a federal crime that will undoubtedly result in prison sentences for the perpetrator. Unfortunately, the insidious nature of this type of identity scam means a call to the FBI often comes too late.
If a lot of time has passed since the home title transfer, or if the thief used a false name or shell company during the fraud, it can prove difficult to catch them or get the property back.
Be proactive about safeguarding your property. Set up credit monitoring and identity theft protection to alert you as soon as any suspicious activity takes place. The faster you can act, the more secure you and your loved ones’ homes will be.