What if someone steals my house?
Sounds crazy. Conjures images of crooks, heavy equipment, and your house, sailing down the highway on the back of a flatbed truck.
But a house is more than its physical presence. It’s the container for thousands of dollars that can be leveraged – borrowed, lent, or yes, stolen.
This has been a fact ever since identity theft became a thing – the potential for someone posing as you to get a loan based on the collateral (equity) in your home. Lenders have tightened their screening, and requirements around proof of identity, but it remains possible for that kind of theft to occur. Since 2008, a new kind of cyber crime has emerged – this one features the fraudster taking a copy of your deed either from public records or by hacking a title company, and forging a new document, making it appear that you sold the house to him (or her). The fraudster takes the forged deed to the county clerk, who records the new ownership.
Now, the house – on public record – belongs to the thief, who then merrily applies for a multitude of loans, takes the money, and leaves you at the mercy of his creditors, who then seek to sell your house for non-payment.
In the end, the true homeowner will no doubt prevail, but reverting title back to the homeowner can be more complicated than the county clerk simply scratching out the faker’s name and re-inserting yours. In the end, cleaning up the mess can be expensive.
Which is why companies offering title lock services can look attractive, even with their fear tactic advertising.
Shouldn’t your title insurance protect you from criminals coming after your equity? After all, you paid for it when you bought your house, yes?
Yes! And also, no.
Your title insurance protects you from any event that happens previous to your taking title to your property. So, let’s say, back in the wood pile, a previous owner of your property signed a deed to a non-local friend in exchange for some quick cash and permission to live in the property cost-free for 10 years. The occupant of the house then died, and his family, not knowing about this old unrecorded deed, sells the property to you. A year later, the holder of the unrecorded deed returns to town and discovers you living in the house he thinks he owns. A fight ensues and your title company comes to your rescue, deploying a phalanx of lawyers on your behalf, overwhelming the opposition while you relax and maybe get a mani-pedi at a nearby spa.
Not so if a dirty rotten scoundrel passes a fake deed on your property two years after you bought it. The more time passes until it’s discovered, the more liens and loans it will gather at the hands of the criminal. Debt that will have to be removed from the house.
A title lock company that provides ongoing monitoring of your county records can alert you if someone records a new deed on it. Despite the name, the company doesn’t “lock” the title, nor does it defend your title if a loan results from the forgery. All it can do is alert you so you can take steps to correct the record before a loan file is opened on the property.
As long as you understand these limitations, you can sign up for an account IF you can find a reputable company. Which is another issue altogether. Scammers can set up companies looking to steal information from you rather than protect you. It’s a fox/hen house thing.
Another option would be to check the record yourself. It’s free in most counties to view the record, and you can set your calendar to check it monthly. If your property is in Yamhill County, go to : Digital Research Room and enter your name. Easy peasy.
Folks who hate computers can simply call the Yamhill County Recorder and ask for a records check on your property. In Washington County, you can request a record online but there is a wait to receive the document. You may also call the recorder’s office at 503-846-8752. In Clackamas County, where records are not currently online, you can call 503-655-8551 for help. County officials say they are working to get their records online.
It might help you to know that title theft, as it’s called, is still rare. You’re most vulnerable if you have a long-held property with either no mortgage or a very small one (in other words, lots of equity). If the property is vacant and/or, you’re a non-resident owner, you’re more likely to be targeted since debt notices are sent to the address of the house rather than directly to you. And, even if one arrives via mail forwarding, you’re less likely to pay attention to a mailer from a mortgage company you’ve never heard of.
Since the new title lock ads have hit the airwaves, county clerks have been inundated with calls from panicked homeowners. One, who asked not to be identified, stressed how rare the title theft issue is. She said, “Please tell people not to freak out!”