Picture this: You just bought the home of your dreams, you get everything moved in and a few months later you receive a notice of foreclosure. How could this happen? Sure, there was a lot going on during the move, but you swear you would have paid your bills. You contact your local tax office to see what's going on and you learn that not only are your tax bills being sent to another address, but the name on your Deed isn't yours! Nowadays this is everyone's biggest fear - Title or Deed Fraud. Finding out that the property you love has been stolen from beneath you without even knowing. Today we're going to discuss how this happens and what you can do to prevent it.
Title theft, or deed theft is the sneaky operation of initial identity theft, leading to fraudulently changing the title of a home into another person's name. This happens when a thief steals an identity and forges a deed with the stolen identity, making the deed seem as if the thief is the new property owner.
Lucky for you, title fraud is very unusual in the state of North Carolina. This is because the County records your title instead of you having to carefully guard the physical copy, like in some other states. However, just because it is unusual does not mean it doesn't happen! Most cases of title fraud occur when a house is left blatantly vacant for an extended period, the owner has passed away, or the property is infrequently maintained.
Title fraud in North Carolina requires several tedious steps. First, the scammer must steal your personal information and find the title to your property at the county's Register of Deeds. They will then create a fraudulent contract, making themselves the buyer of your property, and will forge your name onto the contract showing that you have sold your home to the scammer. Alongside drafting a fraudulent contract, they will have the contract illegally notarized and then attempt to have the title recorded again by the Register of Deeds in their name. Because of how specific and laborious the process is, it typically doesn't happen that way.
More often than not, if a scammer is trying to steal property in North Carolina, it's by attempting to persuade an attorney that they are an heir to a deceased property owner. (On a side note- this is why Estate Planning is so valuable. You can write in your will exactly who is and isn't an heir to your assets.) After a family member's passing, it is important to quickly file the death with your local Probate court. This closes the time-gap where a scammer might have an opportunity to sneak onto a title. Along with attempting to fraudulently coax an attorney, scammers may also attempt to swindle elderly individuals into "Refinancing" their homes. The Refinance is usually a 'front' that actually ends up being a home sale in which the scammer transfers title ownership into their own name.
The first thing you can do to deter title fraud is to take preventative steps such as purchasing title insurance. Title insurance will oversee and protect your title from title fraud for every minute of the year. Alongside title insurance, you can check the property record on your county's register of deeds website. While doing so, you'll want to look for loans that you didn't take out, titles that you or your attorney didn't sign, or any possible liens.
Keeping a close eye on your bills is an additional way to ensure you are not falling victim to title fraud. If any of your utility or tax bills fail to arrive, there's a possibility that your identity and title has been stolen. Once scammers steal your identity and title, they will have your utility and tax bills directed to a different address. If this occurs, first call the companies where the identity theft and fraud occurred, set a fraud alert with any and all creditors and pull your credit reports, report the identity theft to the FTC, and immediately file a report with your local police. When you suspect any instance of title theft, act quickly!
As we discussed, title theft comes from identity theft which may also mean that there is the possibility for fraudulent purchases on credit cards, home equity being stolen, and more. Scammers don't typically target one thing. They'll take "all that AND a bag of chips!" While title insurance may seem like another unnecessary investment that's being pushed onto you when purchasing a home, it's a lot cheaper than the worst case scenario that could occur without it. Stay protected, purchase title insurance, keep an eye on your deed with your local Register of Deeds, and enjoy your home!