Rick Kahler: Can home title thieves can't steal your house?
No, they can't.
[Editor’s comments in brackets]
Home title theft.
This is a “threat” I only learned about from frantic radio
commercials warning that your home can be stolen from you. They claim thieves
can deed your property to themselves and then mortgage or even sell it without
your knowledge. In fact, they may have done so already! You may have lost all
your home equity! You’ll discover the fraud when you are evicted by a
foreclosure or new owner!
Of course, after all these alarms, the ads offer a solution:
buy their title theft insurance. They promise to shield your title, monitor it
24/7 and alert you when a fraudulent title transfer is filed. One company
charges $79 a year for $1,000,000 of title theft insurance. It’s highly
unlikely any such company will ever pay out a dime of insurance. [One never knows, does one? With identity theft rising, need we say more?]
The claims are so over the top that these companies either
don’t understand the law or are intentionally
bending the facts. Like most
things, these outlandish claims include a grain of truth. It is true that
anyone can forge your name to any document, including a deed supposedly
transferring title to the forger. Such a deed could be filed with the county
register of deeds.
That doesn’t mean someone has stolen your title.
First, a forged deed is not valid and conveys nothing. Only
you can legally transfer your title to a third party. If a buyer or a lender
rely on a forged deed and don’t do their due diligence on a property’s title,
they are out of luck. They, not the legitimate property owner, will ultimately
lose any money paid to the thief. [This is why title insurance is important.]
Second, a would-be forger could easily get a blank deed form
online and fill in your property’s legal description obtained from public
records. However, the signature must be certified by a notary public, who is
required by law to verify your identity.
Third, it is next to impossible for the thief to mortgage or
sell the property to a knowledgeable lender or buyer. Lenders, title companies
and real estate firms have so many safeguards in place that there is almost no
chance a fraudulent transfer won’t be discovered. The required credit reports,
employment and income verifications, back tax returns, appraisals and title
insurance are bound to alert you and the lender that something is wrong.
Even with a cash buyer, a thief’s chances of success are
small. Only the most naïve buyer will fail to obtain title insurance. Title
insurance protects buyers against defects in the title, including liens, fraud
and forgery. It will alert the buyer or lender to any defects prior to closing.
If a title company misses a defect, it must pay for any damages. No legitimate
attorney or real estate firm will allow you to buy a property without this
insurance.
Fourth, if a buyer is naïve enough to buy property without a
legitimate appraisal or title insurance, it is possible they could be conned.
If they show up in your driveway with a moving van, however, they — not you —
are the ones at risk of losing their money.
Fifth, forgery is a felony in all 50 states, punishable by
jail time and heavy fines. The court might also require restitution for damages
caused by the forgery, such as the costs of clearing the title.
In the extremely unlikely event that someone goes to the
trouble and risk of committing all these crimes, the cost of clearing the title
is the biggest risk to a homeowner. That will require the assistance of an
attorney. Would that potential expense make it worthwhile to consider buying
title theft insurance? Perhaps, assuming the policy covered such expenses.
Unfortunately, none do.
Rick Kahler is president and owner of Kahler Financial of
Rapid City.
[Most cases of stolen title are from decedent’s estates,
especially in rundown neighborhoods.
Spying an empty house, maybe the owner is written up in an obituary, or
the thief just finds out about it, it’s a prime subject for title theft. Agreed
that a savvy buyer will most likely not get trapped, lenders are sometimes not
so savvy.]
We are the New Jersey title insurance agent that does it all for you.
For your next commercial real estate transaction, house purchase, mortgage refinance, reverse mortgage, or home equity loan, contact us, Vested Land Services LLC. We can help!
For your real estate purchase or mortgage refinance or
if you have questions about what you see here, contact
Well, this sure isn't about title insurance but it's worth a look from our friends at ProtectMyID. With identity theft on the rise, here are some tips that you might have been affected by identity theft.
1.Failing to receive bills or other mail
This could indicate that an identity thief has taken over your account and changed your billing address, says Siciliano. "Make sure to follow up with creditors if your bills don't arrive on time."
2.You're rejected for credit
"Being denied credit or being offered less favorable credit terms, like a high interest rate, for no apparent reason, is a sign your identity may have been compromised," Siciliano says.
3.You're getting bills for purchases you didn't make
If you start receiving bills or notices of overdue payments in regard to accounts you don't have, you have probably become a victim of identity theft, says Steven J.J. Weisman, a college professor who teaches white-collar crime at Bentley University and is the author of the book Identity Theft Alert. "In this case, you should contact the creditor and inform them that you have been a victim of identity theft and it is not your debt, and also file a police report. "While there is little chance of the criminal being caught. It helps prove that you have been a victim of this crime."
4.Your bank account, brokerage account, credit card account or other accounts have unauthorized transactions
"Again, look into the specific charges, file a police report and demand that the fraudulent activity be stopped and the institution reimburse you for any losses," Weisman says. "You should also be regularly monitoring your credit reports and all of your financial accounts to recognize fraud as soon as possible."
5.You receive a tax transcript in the mail that you didn't request
"Under this scenario, a fraudster logged on to the Internal Revenue Service website and tried to get your information and couldn't download it immediately because some security test failed," says Abby Eisenkraft, chief executive officer of Choice Tax Solutions, Inc. "Consequently, the IRS mailed it to you, instead, under the assumption you requested the document."
6.Your electronically led tax return is rejected
This a big sign your identity has been compromised, says Eisenkraft. "That's especially the case if your return is rejected and there are no typos and the Social Security number is correct. What likely happened is that an identity thief led a tax in your name, claiming a fraudulent refund."
7.You receive a tax refund you did not request
Here, you may get a check or pre-loaded debit card. "What happened is that an identity thief led a fraudulent return and will try to and the refund in your mailbox," says Eisenkraft.
8.Your employer lets you know you've got a data security problem
If a hacker has your Social Security number and the name of your current employer, they can try to collect unemployment benefits in your name. "In this case, if your company is on the ball you might hear from someone in human resources," states David Cox, an identity theft expert and CEO, and founder of LiquidVPN, in Cheyenne, Wyo. "Most hackers will check your social media to see if you just quit a job or just started a new job. With this information, they are much more likely to get away with it for quite a bit longer. Eventually, you will hear from your former employer or the unemployment agency."
9.You get two-factor authentication alerts
It's a problem when you get a text message sending you a six-digit pin to enter into a service or membership you don't recognize, says Ralph Rodriguez, an MIT Fellow, and chief technology officer at Conrm.io, a personal data security firm. "Maybe it's a new account," Rodriguez says. "Perhaps it's account recovery for your bank. The point is you don't know. And it's a very eerie feeling when it happens."
10.Your credit score is actually rising
Strange, but true, Rodriguez says — a rising credit score can mean trouble on the identity fraud front. "Check your credit reports frequently for accounts you didn't open and hard inquiries which could suggest fraudsters are trying to extend credit in your name," he advises.
11.You get small "test charges" on your credit card
Hackers often place a small charge for a couple of bucks on the card to see if it will go through before they initiate an attempt at a larger fraud later, says Ross Federgreen, CEO of CSR, a compliance solutions firm, and a data privacy expert. "If you have a small charge you don't recognize, don't ignore it," says Federgreen.
12.You get increased direct mail and phone solicitations for expensive items
The notices could be for cars, loans, and home improvement, and other big-ticket items," Federgreen says. "This could be the result of new high-ticket activity run on your account."
We are the New Jersey title insurance agent that does it all for you. For your next commercial real estate transaction, house purchase, mortgage refinance, reverse mortgage, or home equity loan, contact us, Vested Land Services LLC. We can help!
For your real estate purchase or mortgage refinance or
if you have questions about what you see here, contact
For your next commercial real estate transaction, house purchase, mortgage refinance, reverse mortgage, or home equity loan, contact us. We can help. Located in Fairfield, NJ, we are the title insurance agent that does it all for you.
For your next title order or
if you have questions about what you see here, contact
Stephen M. Flatow, Esq.
Vested Land Services LLC
165 Passaic Avenue, Suite 101
Fairfield, NJ 07004
Tel 973-808-6130 - Fax 973-227-0645
E-mail sflatow AT vested.com
In-House Counsel
Red Flags Rule and Identity Theft Protection Compliance
Tyler W. Mullen, The Legal Intelligencer
Have you ever been many miles from home, perhaps on vacation, when suddenly your bank notifies you that your credit card account has been frozen? Such occurrences always seem to happen at the most inopportune moments. However, the credit card freeze may simply be the bank's attempt to comply with the so-called "Red Flags Rule."
In our ever-evolving technological landscape, consumer information may be more vulnerable now than ever before. Instances of identity theft—using another's personal data fraudulently or deceptively, usually for financial gain—occur at an alarming rate. In 2014 alone, an estimated 17.6 million U.S. residents experienced some form of identity theft, according to the Bureau of Justice Statistics. In an effort to curb the identity theft epidemic, various federal regulators administer the Red Flags Rule, requiring certain financial institutions and creditors to take extra care in protecting consumer financial information. Although general counsel of banks, savings and loan associations, and credit unions clearly should take note, the rule is very broad, and less obvious entities may also need to comply with the rule.
What is the Red Flags Rule?
The Red Flags Rule, originally born under the Fair and Accurate Credit Transactions Act and implemented by the Federal Trade Commission, is a regulation designed to combat consumer identity theft. Although first implemented only by the FTC, Dodd-Frank expanded the number of agencies responsible for enforcing the rule. Now, many agencies including the FTC, U.S. Securities and Exchange Commission, U.S. Commodity Futures Trading Commission (CFTC) and Federal Deposit Insurance Corp. (FDIC) each enforce substantially similar versions of the rule within their respective regulatory spheres.
The rule requires covered persons and entities to implement written identity theft prevention programs designed to detect, prevent and mitigate identity theft by monitoring "red flags." Red flags are patterns, practices, or specific activities indicating the possible existence of identity theft. Some examples of common red flag categories include unusual account activity, inconsistencies in personal information, or alerts from credit reporting, according to the FTC's "Fighting Identity Theft With the Red Flags Rule: A How-To Guide for Business."
Which Entities must Comply?
Financial institutions and creditors offering or maintaining covered accounts are subject to the Red Flags Rule. Therefore, the first step in determining whether the rule applies involves identifying whether an entity constitutes a "financial institution" or "creditor." The second step is to decide whether such financial institutions or creditors offer or maintain "covered accounts."
• Financial institutions or creditors.
Financial institutions include banks, savings and loan associations, mutual savings banks, credit unions, and other person or entities holding consumer transaction accounts. A transaction account is an account from which owners may make multiple payments to third parties. Furthermore, under the SEC's version of the rule, financial institutions includes certain brokers, dealers, investment companies and investment advisers.
The definition of creditor is relatively less clear and likely more inclusive. Creditors are determined by conduct under the rule, not class. Creditors include any entity or person that, regularly and in the ordinary course of business, extends or arranges for credit and (1) obtains or uses consumer reports in connection with a credit transaction, (2) furnishes information to consumer reporting agencies, (3) advances funds to or on behalf of a person based on a repayment obligation, or (4) offers or maintains credit accounts subject to reasonably foreseeable identity theft vulnerabilities.
Thus, the definition of creditor is extremely broad and covers a wide spectrum of businesses, from banks and finance companies to automotive dealers and utility companies. The definition does, however, expressly omit those who advance funds for expenses incidental to services provided by the creditor, which shelters many professionals who allow delayed payment for services. However, determining whether an entity or person constitutes a creditor is ultimately a fact-specific inquiry with no bright-line rule.
• Covered accounts.
Finally, as mentioned above, only financial institutions or creditors offering or maintaining covered accounts are subject to the rule. Covered accounts include both (1) consumer accounts used for personal, family, or household purposes involving multiple payment transactions, or (2) any account entailing a reasonably foreseeable risk of identity theft, or risk to the safety and soundness of the financial institution. Credit card accounts, mortgage and automobile loans, and checking and savings accounts fall into the first category; they are all consumer accounts from which multiple payment transactions can be initiated.
The second covered accounts category is the catch-all. Individual risk assessments should be performed to determine whether accounts involve reasonably foreseeable identity theft risks. Common factors to consider include how the account is opened or accessed. For example, accounts that may be accessed remotely are typically higher risk than accounts requiring the physical presence of the account holder.
Penalties for Noncompliance
Beyond exposing consumers to the ever-increasing threat of identity theft, failure to comply with the Red Flags Rule can prove costly for businesses. The FTC may seek monetary penalties of up to $2,500 per knowing violation of the rule, or injunctive relief requiring the entity to comply with the rule. Penalties are assessed based on the degree of culpability involved, history of prior conduct, ability to pay, the effect on the business's ability to continue, and other factors as justice requires. Additionally, as many general counsel know, disputes with federal regulators typically involve hefty legal expenditures and opportunity costs.
How do Covered Entities Comply?
So, how can covered entities protect their customers from identity theft while also protecting themselves from administrative enforcement? Simple: Covered entities must implement a written identity theft prevention program consistent with the Red Flags Rule. The rigor and comprehensiveness of a particular entity's program can be commensurate with the level of risk posed to consumers. However, each program should include four basic elements.
First, programs must identify relevant red flags, which may vary depending on the nature of the business and type of account. For instance, a common red flag indicating stolen account information involves purchases in locations not typically associated with the account. The rule gives some guidance on categories of common red flags, which include alerts from credit reporting companies, suspicious documents, inconsistent personal identifying information, unusual account activity, and notices from law enforcement or customers.
Second, programs must be designed to detect relevant red flags. Perhaps the most common method of detecting red flags involves personal identity verification procedures. You may have applied for a credit card recently, only to spend what seemed like an eternity answering detailed questions about your past addresses or employers. Such procedures—though mildly annoying—are designed to protect consumer information. Other methods, such as password encryption, PIN number usage, and restricting the ability to open accounts from telephones outside an applicant's home, may also be employed.
Third, programs must dynamically respond to red flags to prevent or mitigate identity theft. Freezing the account, contacting the account holder to verify account activity, or simply monitoring the account for a specified period of time may be appropriate. However, even measures as drastic as notifying law enforcement may be necessary.
Finally, programs must include procedures for periodic reassessments and updates as necessary. Identity theft techniques will evolve as technology develops and criminals become more tech-savvy. Means of preventing identity theft will also undoubtedly evolve. Each program should be revisited periodically in order to stay abreast of any relevant developments.
Such identity theft prevention programs must be approved by a company's board of directors, or other senior management if no board exists. Programs should also outline applicable staff training procedures, teaching the appropriate people to implement the programs and identify red flags. Periodic oversight by either the board or senior management is also highly advised.
In light of recent technological advancements and the need for protecting sensitive consumer information, identity theft compliance, as governed by the Red Flags Rule, is an important consideration for general counsel. •
Five tips on how to avoid identity theft. We’ve had it happen to us and can testify how it affects your life.
“Everyone makes mistakes. After all, it's only human to goof up now and then. But if you want to protect yourself from identity theft and other financial scams, you need to play it safe, be smart and avoid simple mistakes that can expose your financial data and identity to fraudsters.”
Here are the five tips:
1. “Never carry a Social Security card, whether it's your own or your spouse's, parent's, child's or other family member's, in your wallet.”
While there’s no doubt you'll need your SS number to apply for a job, get a mortgage “most people don't need to give out their Social Security number on a day-to-day basis.”
"Another tip: Don't write a Social Security number on a scrap of paper and carry that in your wallet instead of a Social Security card. If your wallet is lost or stolen, a person of criminal intent can easily guess what those nine digits are.”
2. Don’t yak on a cell phone in public.
“Elevators, public streets, restaurants, airport terminals -- these are but a few of the public places where Linda Foley, founder of the Identity Theft Resource Center in San Diego, says a private conversation on a cell phone can be easily overheard by someone who can memorize or write down any financial information that's disclosed.”
3. Be wary of Internet friends.
“[N]ot all of the people you may encounter are who they say they are. Some of them are scammers on the prowl for information.”
"You share where you were born and when you were born, now I know where to get your birth certificate," Foley says. "I can take that and get a duplicate Social Security card and with that I can get a driver's license and with that I can get a passport and with that I can travel anywhere and be you as much as I want."
4. Keep financial information off of your resume.
Posting your resume on line?
“Never put your Social Security number, birth date, place of birth or other financial information on your resume. Be wary of scams that use e-mail messages -- "We loved your resume, and we need your Social Security number to do a background check so we can hire you," is one example -- to prey on unemployed people.”
5. Pass up that free offer in exchange for personal information.
"Be suspicious of offers that seem too good to be true, regardless of how or where they're presented. That free T-shirt may be a lure to entice you to fill out an application for a credit card that doesn't exist. Once you complete the application and get the T-shirt, those data are out of your control.”
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