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.]
For your real estate purchase or mortgage refinance or
if you have questions about what you see here, contact
Dr. Title - 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@vested.com
Follow us on Twitter @vestedland
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