Eighty’s television producer Aaron Spelling’s home in Los Angeles went up for sale several months back, and its owner must have been excited when Eric Schmidt—the former CEO and executive chairman of Google—expressed interest in purchasing it. However, the owner can't sell it to him or to anyone else.
Earlier this year, probable scammers filed their own deed with Los Angeles County, claiming they are the rightful owners. Now, an expensive lawsuit will decide the mansion's rightful ownership.
On this coast, just two weeks ago, a group in New York was arrested for stealing the title of a home in the Bronx. The victim asked Marcia Campbell, owner of Extreme Realty, to help transfer ownership of her childhood home to the victim’s sister. Campbell, her husband and business associate instead forged the homeowner’s signature on documents to transfer the property to their shell company. They then took out a mortgage of $493,500. After obtaining the loan — and dodging questions from the homeowner — Campbell and associates defaulted. The lender eventually filed for foreclosure, leaving the victim unhoused. The foreclosure is now on hold following intervention from the attorney general.
According to numerous sources, more and more homeowners are falling victim to seller impersonation scams because scarily good AI technology and huge amounts of public information are now available on the web. Homeowners with a substantial amount of home equity are more likely to be targeted for home title theft, as are those who own more than one home. This is especially true for vacation homes, investment properties and unoccupied real estate.
A study prepared for the American Land Title Association (ALTA) earlier this year found that 28% of title insurance companies experienced at least one attempted title theft in 2023. Of those, 16% said they had paid claims related to seller impersonation. These figures are expected to climb significantly this year.
What’s Being Done to Prevent Title Theft?
A coalition of 6 industry associations has banded together to lobby for changes in deed recording to make ownership more transparent while maintaining data safety.
Specifically, they are asking local and state governments to do the following:
Offer better protection for taxpayer information while keeping land records accessible and public
Require ID-verification options for in-person notarization
Continue education requirements for real estate licensees and notaries
Ensure property owners nationwide have free access to property recording notification systems
(something only a handful of states offer – Virginia being one of them).
Cash transactions are one of the more common ways scammers transact their deed thefts. Now,
title companies and attorneys will have to report the identities of all parties involved in all-cash
real estate transactions. This stems from a Treasury Department requirement to monitor drug
cartels and foreign officials who use real estate transactions to launder their money.
Many local and state governments, however, are earmarking more resources for combating this type of scam. In Virginia, deed fraud is now a class 4 felony and has no statute of limitations. Other states are enacting similar laws to protect their residents.
Many local and state governments are earmarking more resources to combat this type of scam. In Virginia, deed fraud is now a class 4 felony and has no statute of limitations. Other states are enacting similar laws to protect their residents.
Cash transactions are one of the more common ways scammers transact their deed thefts. Now, title companies and attorneys will have to report the identities of all parties involved in all-cash real estate transactions. This stems from a Treasury Department requirement to monitor drug cartels and foreign officials who use real estate transactions to launder their money.
How is the Scam Executed?
Home title theft is perpetrated in a few different ways. The most common are phishing schemes, malware, data breaches, unsecured Wi-Fi networks and mail theft. Thefts can also occur if a homeowner loses sensitive documents like their deed or a mortgage statement. Here’s a closer look at how they are pulled off:
Phishing
Phishing is when a criminal pretends to be a legitimate company or person to get a homeowner’s personal information. They may send an email or letter that looks like it’s from a bank or government agency or call a homeowner and pretend to be someone they’re not.
Malware
Malware is software that criminals use to access a homeowner’s personal information. They can install it on the homeowner’s computer without their knowledge or trick them into downloading it.
Data Breaches
Data breaches give criminals access to a company or organization’s database, which contains personal information of donors, customers, or contacts. They sell the information on the black market or use it to commit home title fraud themselves.
Unsecured Wi-Fi Networks
If a homeowner has an unsecured Wi-Fi network, criminals can access personal information if close enough to the router. They use this information to commit fraud or steal the homeowner’s identity. Homeowners who access the Internet using unsecured public Wi-Fi are also at high risk.
Mail Theft
Home title theft occurs through mail theft containing personal information.
Loss
Failing to shred documents with personal information on them or having them lost or stolen can lead to home title theft.
What Happens If a Property Title Is Stolen?
If a property title is stolen, the homeowner could lose their home through unauthorized sale or foreclosure. Even if the homeowner discovers the theft before anything else happens, the theft can result in legal issues, damage to the homeowner’s credit profile, and damage to the property itself.
Should You Be Worried About Your Title?
In general, home theft is not as common as other types of identity theft, but the threat is growing. If you are careful with your personal information and consider yourself relatively tech-savvy, you won’t need to worry as much. In general, seniors are most susceptible to home title theft and other forms of identity theft.
There are clues you can watch for that could indicate your home has been targeted. These include:
Receiving bills or collection notices for accounts you didn’t open
Being denied credit.
Receiving a notice from the IRS that you have unpaid taxes
Getting calls from debt collectors for debts you don’t owe
Discovering your home has been rented out or sold
How to Protect Yourself From Title Fraud
There are several things you can do to protect yourself from home title theft:
Keep track of your mail, including bills and other important mail. If you stop receiving these, it could mean someone has changed your address. Be sure to check your mailbox often, and don’t use a mailbox to send out correspondence. Always take it to a post office.
Monitor your credit report. Regularly review your credit report to make sure you catch suspicious activity like new accounts opened in your name and unauthorized changes to your existing accounts. Credit Karma is a free service you can use to check your report as often as you’d like, and they send you alerts if there has been a change to your credit rating.
Protect your personal information by shredding unwanted documents that contain your personal information, such as bills and bank statements. Keep your Social Security card and birth certificate locked up or in a bank box. Never give out personal information over the phone or online unless you dealing with someone you know.
Be healthily suspicious. If you notice someone is casing your mailbox, your home, or your neighborhood, report it to the police. Install security systems to monitor all of your properties.
Get Enhanced Title Insurance. If you didn’t opt in to owner’s title insurance at closing, purchase enhanced coverage now. This policy can protect you if any liens or claims are filed against the property while you are the owner. Title protection services are often scams themselves, so be sure to purchase a policy from a reputable source.
What You Can Do If You are a Victim
Most of the time, property owners are on their own when fighting imposter fraud. If you think you may be a victim of home title theft, there are several steps you can take to recover and protect your credit and financial future.
Contact the three main credit bureaus (Equifax, TransUnion, and Experian) and request that a fraud alert be placed on your credit file and that a credit freeze be put in place. No one will be able to open new accounts in your name. If there are any unauthorized accounts in your report, you can dispute them with each relevant bureau.
File a police report immediately. They can help you create a paper trail that will be helpful if you need to take legal action.
Close all unauthorized accounts. If new accounts using your home title have shown up on your credit report, notify the lenders of the fraud and have the accounts closed. This includes, but is not limited to, your mortgage lender, title insurance company, credit card companies, banks, and online retailers.
Contact your mortgage lender and alert them to what has happened so you can prevent future financial harm and foreclosure. They can be on the lookout for possible fraud.
Retain notes and records - all correspondence and documents related to the theft. This will be helpful if you need to file a lawsuit or take other legal action.
In conclusion, being diligent is the best way to prevent becoming a victim to this growing threat.
Sources: Miami Herald, Forbes, Bob Vila
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