Home title lock claims to notify you of fraudulent changes of your home title made due to identity theft, so you can report and sue the criminal. However, it doesn’t stop the deed from happening, so it can be a waste of money. As an alternative, an owner’s title insurance is a better choice.
Over 1 million break-ins happen in the US each year. Further analysis shows that 75% of homes will be broken into at some point in the following 20 years. This sounds scary, but there’s just so much thieves can take. Appliances, jewelry, furniture all can be insured and repurchased easily.
What’s scarier is losing your property. One of the newer methods robbers use is stealing the title to your home. Once you purchase a home, the title is held by your lender. As soon as you pay off the mortgage, it’s transferred to you. And that’s when criminals come to play.
Thieves get creative, but so do businesses. The newest, heavily-advertised product is the home title lock. Let’s dive into the fine print and what it can actually provide.
What is a home title lock?
Home title lock is a service that monitors your home title state and checks for fraudulent transfers, borrowing, or selling.
They notify you of any changes to your home title that you didn’t make, but after they’re done. Unfortunately, they can’t stop or prevent the transfer from happening.
Home title theft is a form of identity theft that’s just emerged in the last couple of years. As technology goes forward, so does fraud. Criminals use your identity to take out loans sell or transfer the property to their name.
You can’t lock or protect the home title from ever moving to another person or getting used as collateral when taking out a loan, so the home title ‘lock’ is a false claim.
Is title theft a real problem?
While companies providing this service claim that over 55 million home titles are stolen each year, the FBI released information that they had only 9,600 cases in the last couple of years.
It drew attention because it’s a new form of identity theft. It’s not as common as the ads claim it to be. As a responsible homeowner, you’re supposed to have home title insurance when you buy your house. It’s a guarantee that you can’t lose your home suddenly without getting any alert.
This service targets people who aren’t aware of how identity theft works and how a home title can be transferred.
Lenders have rigorous background checks, even if someone tries to take a loan against your house. If they fail to check for fraud, they’re the ones losing money, not you. You can clear up your title with the help of cybersecurity experts and lawyers.
Fortunately, it’s not as easy to steal a home title as advertised.
The cost of home title lock
For around $19.95 a month, this service allegedly provides up to $1,000,000 in coverage.
The money is supposed to help you reclaim your home title. But your home title is still yours! And there’s no guarantee that they will cover these costs.
A house is the most valuable asses for the average person. Losing thousands of dollars you repaid for over 20 years is terrifying. Having these thoughts accompanied by testimonials of people who’ve been victims of home title theft, it’s too convincing.
But remember that persuasive marketing is what brings money to the advertiser. It’s not there to inform or protect you but to take your money.
What you get with home title lock
Monitoring service is the only thing you get by purchasing or subscribing to the home title lock offer. They will check your home title periodically to catch any changes. Then, after they notice a difference, they let you know.
They’re not a legal service that can stop or report fraud. After you get notified, you need to contact your lawyer, insurance, etc.
In some states, you can do this on your own for free. The property list might not be up to date often, but it’s worth trying. Go to your government site, search for county assessor, and scroll through the properties. You might even subscribe for consumer notifications to receive an email if there are any changes to your home title.
Signs of home title theft
Home title theft is identity theft. If your identity’s security is compromised, you’re more susceptible to home title theft. This includes IDs, passports, credit cards, social media, computer passwords, etc.
These are the signs to look for:
- Missing or irregular utility and other bills
- Missing rent payments from tenants
- Changes in credit score
- Notifications from a lender you’ve never worked with
- Foreclosure notice
Why you don’t need a home title lock
Let’s imagine a situation. The criminal goes on to take a loan using your house as collateral. All they have to do is file a deed with your signature, which costs no more than $20. The title can get changed to their name, but this is a fraudulent deed.
The county will accept the filling, but it has to be signed by two witnesses and a notary public. The chances that a notary public will sing on a fraudulent deed are very low.
The scammer manages to go through all this, takes the loan, and doesn’t pay. Then you get a foreclosure notice. But, you will not lose your house! That’s a wrongful foreclosure. The scammer never owned your property, so you’re not responsible for paying the loan.
Most lenders ask the loan taker to pay a lender’s title insurance. The insurance covers the costs while they go on and sue the scammer. If the lender doesn’t have the insurance, it’s their loss.
Owner’s title insurance is the way to go
When closing on a house, you need to purchase the owner’s title insurance. Most lenders and real estate agents will advise this. Responsible homeowners should already know about this option too.
The owner’s title insurance is different from the lender’s title insurance. With the second, the mortgage lender is secured that the property title is clean, and they can sell it if you fail to repay your loan.
The owner’s title is also paid at closing as a one-time fee and protects you from third parties trying to claim some or your whole property. Some examples are neighbors building on your property, unpaid loans against the house from a previous owner, a previous unpaid mortgage, utility company passing through your property, etc.
In short, the owner’s title insurance protects you from things that you didn’t discover during the buying process.
How to protect yourself from home title theft
Identity fraud can cause significant financial damage. Home title theft is not as common, but it doesn’t hurt to take precautious measures. Despite ensuring your owner’s title and subscribing to emails from your county, here’s what you can do:
- Use a reputable agency when purchasing your home, don’t go with unknown, new to the market people
- Keep a record of your utility bills and check with the company if one goes missing
- Monitor your credit score periodically for any changes
- Use precautious measures and reevaluate the security of your apps, social media, computer, and email.
Is title insurance a ripoff?
The owner’s title insurance is not a ripoff. Instead, it protects you from things you weren’t aware of during the buying process.
Is home title lock a scam?
Home title lock is not a scam, but it’s a falsely advertised service. They’re simply a monitoring service that checks for changes in your home title. Once they notice a difference, they let you know, and you can act on it. However, they might check once a week or once a month, so you can get your info too late.
Can someone steal the title to your home?
It’s possible for someone to steal your identity and claim your home as their own. It’s mostly done to sell the property or get a loan against it. However, it’s not very common, especially among the younger homeowners.
Cyber literacy is not something a lot of people can be proud of. With the amount of false information, scam, and fraud, it’s natural to believe in a service that claims to protect your most valued asset – the home.
The average borrower takes 30 years to pay off their mortgage. Losing something you’ve worked to own for 30 years is beyond devastating. But a monitoring service won’t protect you. Luckily, home title theft is not as widely spread.
When closing in on the house, it’s essential to take all precaution steps. First, work with a licensed, reputable agency and realtor. Ensure your home, buy owner’s title insurance, and protect your identity on the internet. Finally, ask for help from tech-savvy friends on how to secure your accounts and emails.
But most of all, always double-check scam-looking businesses and the information they’re sharing. Often, it’s widely exaggerated, and you can get the same service for free.