Homeowners may be happy when they can finally pay off their mortgage, but this feat comes with risks.
Retirement Tip of the Week: Be vigilant in protecting your identity and assets, and be aware of how you could fall victim to various scams or theft related to your home.
In property theft, thieves transfer a house deed from the rightful owner to someone else’s name, using the owner’s personal information. Title theft can also take the form of using equity in a home, such as by opening a home equity line of credit, known as a HELOC, according to Quicken Loans. When a house is empty, thieves can go so far as to sell or rent the property.
Title theft isn’t particularly common, but it does happen, and it’s another reason why people need to protect their identity and other sensitive information. Older Americans may be at greater risk, especially if they have a lot of equity in their home. About 11,500 people reported losing more than $350 million to real estate scams in 2021, although this figure also includes fraud related to real estate listings and leases, according to the FBI.
Homeowners should maintain their records and may even occasionally want to confirm their information with their county deed office, the FBI said. Any posting from a mortgage lender should be checked to ensure it does not relate to your specific property.
If you are a victim of property theft, open an identity theft case with the Federal Trade Commission, alert creditors about the fraud and check your property insurance, which protects the rights of homeowners and which mortgage companies often require home buyers to have, Quicken Loans said.
There are companies that offer title protection services, although critics say this is not the same as title insurance and does not notify a homeowner of a problem until after it has occurred.
“Do you need this service to protect your home from property thieves? The answer is no,” the Maryland Attorney General’s office said in a consumer alert about property protection services. “Title fraud is very rare and is almost never successful. If someone ever tries to transfer your deed without your consent or knowledge, as these companies suggest might happen, the transfer is fraudulent and void from the start.
Instead, homeowners should monitor their identities and monitor their credit scores, the office said.