It is no doubt the last thing that is on your mind as you are house hunting, but as a homebuyer, you need to be aware of real estate title fraud and how to protect yourself. What is title fraud? Title fraud is like a kind of identity theft – you won’t even know that you are a victim until your mortgage mysteriously goes into default and foreclosure proceedings are started by the lender. It is then that you will learn that someone has used false identification to pose as you and registered forged documents to transfer your property into their name. Next they will get a new mortgage against your house and property. (Remember – the lender still thinks that it is you.) Once this new mortgage is dispersed, the imposter will take off with the funds and the bank will assume that you are the one defaulting when no mortgage payments are made!
How can you protect yourself? Here are some tips:
Personal Information – invest in a small paper shredder and safely dispose of all your personal financial information that you no longer need. A good place to start would be with credit card and bank statements.
Keep Track – keep an eye on your mail. Check to make sure that you are receiving your bills regularly. Most bills and statements will arrive on a fairly regular cycle – pay attention to it. If you haven’t received one lately, call the sender to check and see if and when it was sent. This is particularly important when it comes to your bank statements! If this information has been intercepted, the valuable details contained within this document could be used to place a mortgage under another person’s name!
Purchase Title Insurance – the cost of title insurance is usually minimal and will protect you against title fraud.
Teamwork – It is important to make sure that you are working with a professional team. Select a respectable licensed real estate agent and accredited mortgage professional. Remember – neither of this people should have a financial interest in the transaction.
Although the chance of becoming a victim of title fraud is rare, by taking these simple steps you are protecting yourself and your finances from hardship in the future.