A home or any other property is possibly the single largest investment done by the majority of individuals. As you purchase a property, you may protect the property by opting for several types of insurance coverages. These diverse types of insurances will safeguard your home from loss occurring from fire, product theft, or harm due to natural factors like flood and wind. But have you thought about what would be the consequences if there is a situation of title theft? How can you protect your title against this Title theft?
What is title theft?
- A title to a property is the official document mentioning the rights to the possession and ownership of that property. Whenever there is a transfer of ownership, this will be recorded in the government document. A title theft takes place when a fraudulent person procures the title of any property with deceitful intentions. It could be done by stealing the owner’s identity and documenting a fake deal to manipulate the ownership rights to this property. This person can either sell or borrow against the property after performing this duplicitous activity.
- Highly targeted people by these fraudsters are elderly residents and the ones who own a second property, investment property, or vacation homes. They highly look for instances where the property owners will miss any notices and it may offer the chance to earn money before it gets noticed by the actual titleholder. They may take out a mortgage against equity to the property and vanish without going noticed. The actual owner will come to know about the theft when the bank will issue foreclosure on your home.
- Also, if you buy a title that has already been fraudulent, it may incur a huge loss to your investment. If you find that there is any untruly activity against your title, you may immediately contact the recorder or county clerk. This may lead to spending of huge amounts to any legal consequences (including hiring an attorney) or also chances of losing the title itself.
Probable title thefts:
The fraudulent persons may refinance the mortgage, against the equity (equity line of credit (HELOC) and earn profits before you notice. As they will not pay the new mortgage, the actual owner will start facing the heat of foreclosure.
They will target empty homes like rental properties or free vacation properties. This is done so that they can use the fake deal to sell your property without coming to the notice of the owner.
Such fraudulent persons will target senior owners or owners in a financial problem to provide refinancing options. This deal is then registered as a real sale transferring the ownership to the fraudulent.
Which are the possible ways to safeguard from Property Title theft?
There are several ways to safeguard yourself from the risky consequences of property title theft. Since this fraudulent will keep looking for loopholes, as a homeowner, if you are careful then you can avoid such consequences or may even catch hold of the person. Consequently, below are some key points to avoid property title theft:
- Regular monitoring of records: Visit the respective tax website of your state or county and check the records of the property at regular intervals. Verify if the records are displaying your actual name and address.
- Keep monitoring the issues of missing bills: Your title could be in danger if the regular bills begin to vanish suddenly. If you find that you are suddenly not receiving the bills then it rings the bell for you to verify your title status.
- Checking the credit report: Regularly checking the credit report is the best step, irrespective of title fraud. Owners must be well aware of all the payments and ensure that there are no malicious charges. Checking the credit report is a smart way to find title theft.
- A reliable title insurance company will make sure that that the title to that property is clear of any frauds. It safeguards the titleholders against any liens or claims done against the property. There are two kinds of title insurance: lender’s title insurance that is mandatorily asked and owners’ title insurance which is optional but crucial.
What is Title Insurance?
- A title insurance policy will protect the policyholder from any claims or liens associated with the title of the property. Title insurance will cover the costs for easing any title rights issues or provide you with compensation if you lose the title rights to the property. A title insurance policy will cover the homeowner or the lender who has financed the mortgage for that particular property. Lenders will usually demand the owners to pay for the lender’s title insurance that should be included in the mortgage closing charges. But the owner’s title insurance policy is not compulsory but is bought either by the buyer or seller of that property. The Title insurance coverage begins as the person buys the policy and extends infinitely into the past, for both recognized and unknown inconsistencies in the records of the title.
- The title insurance company performs a process called “title search” as you purchase a property. This includes verifying the real estate records at the state or county of that particular property location. It is mainly done to check the ownerships, claims, mortgages, liens, unpaid taxes any previous judgments. Once the title search is completed, they will either offer to sign the agreement or mention any grievances related to the title. There may be hidden defects that even the even careful title search may not reveal but once the title search is completed, they will take care about covering the losses incurring from issues mentioned in the policy.
Several Title Insurances may not directly cover a title theft that occurs as you own the property, but there may be several additions in the policy that can cover this. Hence, ensure to get title insurance from a reliable and expert title insurance company in Utah, Utah Title.