Linda W. owned a house in the Old Fourth Ward area of Atlanta.
The property was in a historical area. Linda bought it in 1990, paid it off, and planned to own it forever.
But she says someone stole the deed to her property.
The problem was, she had no idea the title had been stolen until the house was torn down.
One day she arrived home to find a bulldozer in the front yard. The operator told her that he had been hired to tear down the property.
He said the company bought the property from a woman with the same last name as Linda.
Linda didn’t know the woman, but the unknown woman had filed paperwork to be administrator over the property last year.
Real estate attorney Rick Alembik said…
“A lot of ways these fraudulent deeds are done, is by people who steal. The extent to which it’s reported is probably under-reported, but we’re seeing it, we’re seeing more of it.”
He also said these thieves usually target properties that are paid off or homes that appear abandoned or empty.
In the case of Linda, her house was paid off, and there had recently been a fire at the property, so it appeared empty.
Lately, there have been a lot of TV and radio advertisements that offer title fraud services.
The companies claim it’s a home title protection that will prevent your deed from being stolen.
But are these services worth it?
Here are a few things to consider about property title theft, and if you should take out home title insurance.
A little truth:
When you see TV commercials talking about title theft there is a little bit of truth to them.
The truth is that it can happen, but the chances of it happening are slim.
Anyone can forge your name on a document, including when selling or buying property.
And yes, the forged document could be filed with the county register.
But it would take a lot of forgeries to get to the point of deeding a property. There are a lot of hoops to jump through, but it can happen.
Documents are not valid:
If someone forges documents to steal your deed, it’s not valid. The documents are fraudulent, and they convey nothing.
Only the owner of the property can transfer the title to another party.
If a buyer or lender accepts a forged deed, they are the ones who are out of luck.
A thief can easily get a blank deed document online. They can fill it out with your name and property information, and even get the property’s description from public records.
But the signature must be certified by a notary public. This is required by law to verify your identity, and a notary should ask for multiple forms of ID.
The thief would have to obtain a lot of forged documents that all match up. This wouldn’t be a quick process or an easy crime to pull off.
Typically, a thief would steal property to resell it. They are not going to steal your house to move their family in. They want to flip it.
But there are so many steps in place that it’s unlikely they would be able to do this.
For instance, lenders, title companies, and real estate firms have many safeguards in place, and there is a small chance a fraudulent transfer wouldn’t be discovered.
The required credit reports, income verifications, tax returns, appraisals, and title insurance are going to alert the lender to something being off.
Not your loss:
Even if the thief steals your deed and finds a cash buyer, the chances of success are slim.
Cash buyers still typically obtain title insurance.
That’s because title insurance protects the buyers against defects in the process. This includes problems with the title, liens, fraud, and forgery.
Title companies will alert the buyer to problems before closing. No legitimate real estate agent will sell or purchase a property without title insurance.
If a buyer is naive enough to purchase a property without title insurance and it’s stolen, they are the ones who lose out, not the property owner.
So, in the unlikely event that someone goes to the lengths of committing these crimes, the biggest issue for the homeowner is clearing the title problems.
This would likely require the assistance of an attorney.
If you want to pay for peace of mind for the addtional title protection, by all means, go for it. But it’s unlikely you’ll ever actually need it.