Should Homeowners be Concerned About Protecting Their Home Title?
Some homeowners have recently received in the mail an offer from a company providing services that protect the title of a home from someone stealing it in order to use it as collateral for loans and lines of credit or even a second mortgage without the knowledge of the legal homeowner. According to the service providers, thieves can take money for these items and leave the legal homeowner with the obligation to pay them back.
Is this type of fraud an actual thing? Do homeowners really need a service to help protect their title ownership?
There are many businesses out there trying to make money from offering services that someone may or may not need. It is important to make sure that if you receive an offer to protect the title on your home you assess the company making the offer before jumping in on any interest in their service. It is not uncommon especially in the last few years for several elaborate scams to pop up in the form of brand new companies.
Make sure not to give out any personal information when inquiring about services from a company you may be intrigued by. You also want to verify the company independently on your own or through a third company to make sure they really do provide the services they claim.
In some cases, some new companies may offer services that are already free through the government to homeowners. For example, some states offer a reduction in real estate taxes if you live within the home as your primary residence. All you have to do is fill out the proper portion of your tax return form to receive the discount. But there have been some companies offering to monitor a homeowner's tax bills and will send out a letter to a homeowner communicating that they provide a service to get a tax reduction for a fee.
The best way to find out if your home needs title protection
If you have been mailed an offer for title protection services for your home you can check in to see if you even need this service with the local jurisdiction that your home is in. Many times the office that handles recording or filing real estate documents may offer a service that will notify the homeowner if any document transferring ownership of the home has been recorded or filed.
The local recorder of deeds office or other office handling recording documents for real estate transactions can give insight into this information. If they do offer services to notify you you can simply sign up for an automated system that will send you information if something changes with the title of your home.
Does title fraud actually happen?
Title fraud actually can happen. Some homeowners have lost hundreds of thousands of dollars in equity in their home by someone else using the title of their home for less than reputable means. If someone happens to steal your title they need to create documentation that states they are you and sign the transfer of the document to themselves. At this point, they can try to get a loan against the equity of your home and pull all of the equity out of the property.
It is much harder to do this with homes that are primary residences, it has happened more frequently with second homes where the owner is not in the actual home.
How can you prevent title fraud?
To make sure that no one commits fraud against the title of your home it is best to check the status of the title of your home with the local recording office and then ask them if they have a reporting system. You can check in every couple of months on the status of the title of your home to ensure that there is no funny business.
For more information on purchasing a home in Sanibel Island please contact us anytime.