How does home title fraud work?
Using the homeowner’s name and property address to open a home equity line of credit (HELOC) is a fairly common way cybercriminals might commit this crime. After that, they get the property’s equity and fail to pay the line of credit. This not only takes money from the homeowner, but if they don’t find it quickly, it could also hurt their credit score. Homeowners may face severe repercussions as a result of home title fraud, which is clearly a significant issue. Fortunately, there are methods for catching it early and mitigating the damage.
Refinancing a mortgage and cashing out the equity is another common example. The homeowner begins receiving letters from the bank threatening foreclosure as a result of cybercriminals taking the money and then failing to pay the new mortgage. The majority of the time, this is exactly how homeowners discover that they have been the victims of title theft in addition to identity theft!
Home title fraud can be hard to understand. After all, how is a house basically stolen? How do they get their hands on the house when they can’t even physically take it? The answer is that cybercriminals transfer ownership from the homeowner’s name to their own by filing paperwork with the court. Therefore, even though the actual homeowner may be living there at the moment, the cybercriminals who committed home title fraud are now, at least on paper, the property’s owners.
Typically, a cybercriminal uses a homeowner’s personal information to commit identity theft to start this kind of scam. In order to transfer ownership of the property to themselves, he or she might visit the recorder of deeds at the local courthouse, file paperwork in the homeowner’s name, and then forge the homeowner’s signature. After filing the fake deed in this manner, the cybercriminal acquires title in his or her name and can now do whatever they please with the house.
Most of the time, people don’t want to move in. Instead, cybercriminals who commit home title fraud may have the intention of selling the property and then vanish with the proceeds before the scheme is discovered. This usually happens when the property is empty, like when vacation homes or rental houses are empty right now. The perpetrator of this kind of fraud can thus show the house to potential buyers without the owner’s knowledge.
However, there are some methods by which cybercriminals commit home title fraud without first selling the property.
The homeowner starting receiving notices that they haven’t paid bills related to the house is one of the most common signs of home title fraud. Therefore, if you are a homeowner and start receiving letters from the bank stating that you are behind on the mortgage loan, HELOC, or newly refinanced loan—despite the fact that you are aware that you are not—this is a sign that your property may have been taken over by someone else.
You may also be receiving property-related mail addressed to your house but not your name, which is another sign of home title fraud. Therefore, if your mortgage or utility bills suddenly appear to be in someone else’s name, this could indicate that the home has been taken over by someone else.
In some instances, the cybercriminal may alter the billing address in order to delay your discovery of the home title fraud. Due to the fact that they are no longer being sent to your address, you will suddenly stop receiving bills related to the house, including mortgage and utility bills. If your utilities aren’t turned off first, you’ll start seeing evidence of your late payments on your credit report if you don’t notice this for a few months.
In addition, if you own a house that is supposed to be empty at the moment, such as a vacation home or investment property that you haven’t rented out, keep an eye out for indications that someone has moved in. A cyber criminal may have sold or rented out the house without your knowledge if sudden activity at the house is reported to you by a property camera or a neighbor who watches the house.
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