“FBI Says You May Not Own Your Home,” blares the headline on Home Title Lock’s website.
The fearsome message is echoed in ads featuring radio hosts Kim Komando and Dana Loesch, as well as presidential lawyer and former New York City Mayor Rudy Giuliani, who declares: “When your life is in chaos, your home is your safe haven. Imagine losing your home to some online scammer. In an instant your home is no longer yours. Is this even possible? Yes.”
Home Title Lock offers a “free title scan” and “comprehensive title report” – when you sign up for services at $14.99 a month.
But wait, there’s more: The “Check if You’re a Victim” button on its website leads to an order form with service subscription offers ranging from up to $596 for four years, with various discounts.
Home Title Lock is just one of the companies aggressively pitching title fraud insurance. Like LifeLock – the identity theft protection company that has long been a mainstay advertiser on the Rush Limbaugh show – Home Title Lock markets to people worried about faceless cybercrimes. But although ads promoting various “title lock” services are common, home title theft rarely happens. What’s more, you can protect your home’s title without spending any money.
Home Title Lock did not respond to multiple requests from RealClearInvestigations for comment.
Home stealing, or title fraud, happens, according to the FBI, when thieves track down ownership of a home that’s either empty, a second residence or one occupied by an elderly resident. Then swindlers create a sham identity through credit cards and personal information and take the next step of transferring the property to that non-existent person. They may take a further step of obtaining a home-equity loan against the property. Since much property information is online and stolen identity information readily available on the “dark” web, it’s a multi-layered scam. (Thieves can obtain the title ownership information from public records then send in falsified forms using the fake identity.)
The FBI first issued a report on what it calls “home stealing” in 2008 during the mortgage/credit meltdown, noting “house-stealing is not too common at this point, but we’re keeping an eye out for any major cases or developing trends.”
The most current evidence of title fraud is principally reflected in a three-year-old national study from the FBI, which estimated that some 9,600 U.S. homeowners were victims of title fraud. That’s a microscopic percentage – slightly more than 0.0001% – of the roughly 87 million U.S. homes owned, but it was a cause of concern since it was declared a new venue for identity thieves. The American Land Title Association, a trade group representing the property titling industry, did not respond to RCI’s request for information on title thefts.
With more homes changing hands due to a robust housing market, and more transactions handled electronically because of the COVID-19 crisis, the opportunity for title fraud may be higher today, but it’s difficult to say whether it’s actually happening with greater frequency. One of the best sources on housing activity is provided by a company called CoreLogic, which obtains and analyzes daily property data on 145 million parcels in more than 3,000 U.S. counties.
In its most recent Mortgage Fraud Trends Report (2020), CoreLogic found a slight decrease in overall home loan swindles: “During the second quarter of 2020, an estimated 0.61% of all mortgage applications contained fraud, about 1 in 164 applications. By comparison, in the second quarter of 2019, our estimate was 0.81%, or about 1 in 123 applications.”
But do those numbers include home title stealing? If so, how much of a problem is it in terms of total mortgage fraud? A CoreLogic spokesperson either did not have or would not provide a specific breakdown on title fraud in response to RCI’s request. So those numbers likely reflect a broad spectrum of wrongdoing, which ranges from overvalued appraisals to false mortgage applications. Nevertheless, it’s highly unlikely that there is widespread home ownership fraud involving title transfers in such a highly supervised industry, considering the FBI estimates above.
Nevertheless, the idea that someone is trying to steal the title to your home is horrifying. Imagine someone taking over the deed to your domicile, and thieves pouring salt on your open wound by taking out a fraudulent home-equity loan – against your equity.
That’s what happened to a woman who thought she owned a piece of property in rural, southwestern Michigan through a land contract. When a tenant attempted to title the property in her own name, the local treasurer and sheriff got involved.
What ensued was a complicated case between the woman, who insisted on anonymity, her 91-year-old tenant and her tenant’s caregiver, who all claimed they had title to the property, a small parcel with a trailer parked on it. Deputy Sheriff Kelly Laesch of the Berrien County Sheriff’s Department said the ownership issue was eventually resolved.
“The county treasurer told me something wasn’t adding up,” Laesch said, when back taxes started to accrue, and the title wasn’t in the original owner’s name. “We found the owner, though, and managed to get it back in her name.”
Home title fraud tends to be lumped in with identity theft, making precise statistics hard to come by.
Title fraud may seem more common than the numbers show. There are all those ads, of course. And the problem tends to be lumped in with the much more publicized problem of identity theft, a big umbrella category that dominates consumer credit fraud statistics, according to Federal Trade Commission data. Stealing personal financial information to obtain credit under false circumstances is a significant problem, involving more than 650,000 cases last year reported to the agency. That’s up 20% from the previous year, according to FTC Consumer Sentinel Network reports.
Credit cards falsely opened using stolen information topped the list of most prevalent swindles, impacting more than 167,000 Americans last year. Like many consumer services, “lock” programs exploit people’s fear of identity theft, which has accelerated during the COVID crisis even after exploding in recent years.
Neither the FTC, nor the Better Business Bureau’s Scamtracker, though, maintains a separate category for property title fraud. In any case, it’s far more probable that financial abuse such as the retitling of assets is done by family members rather than strangers online, according to a recent University of Southern California study. Notably, only one complaint on home title fraud was registered in a BBB Scamtracker search. This kind of crime doesn’t even make the list of the top 27 consumer scams tracked by consumerfraudreporting.org.
Like title lock services, the earlier spate of general credit monitoring services were also largely unnecessary if you did a little consumer vigilance.
Giuliani, coincidentally, was previously involved in pitching LifeLock, a credit protection service. Like the title lock company, LifeLock was offering something consumers can do on their own – for free. The FTC sued LifeLock in 2015 and reached a $100 million settlement that will provide refunds to consumers who purchased the service. Giuliani, who was not named in the lawsuit, did not respond to requests for comment.
“The FTC alleged, among other things, that LifeLock failed to establish and maintain a comprehensive information security program to protect users’ sensitive personal information, falsely advertised that it protected consumers’ sensitive data with the same high-level safeguards used by financial institutions, and falsely claimed it provided 24/7/365 alerts ‘as soon as’ it received any indication a consumer’s identity was being used,” the agency stated last year.
The Home Title Lock site also entices readers to click to “check if you’re a victim” combined with a telephone number to “speak to a live operator.” Komando’s website states that Title Lock is a “paid sponsor” and provides a link to the Title Lock site.
Yet is stealing a title and getting stolen home equity credit as easy as forging title documents? No, because it involves obtaining and transferring a title or deed, deceiving a title company, county recorders of deeds and lenders, each of whom have several layers of protection in place.
And don’t confuse home stealing with the much larger problem of mortgage fraud, which involves obtaining home loans using false or stolen information. It’s also relatively easy to monitor credit activity through free credit reports. If you suspect wrongdoing, you can “freeze” your credit file, again, for free. Of course, you can pay a third-party to monitor your credit information, although it may not stop any identity theft crimes. There are several other companies that offer this service.
According to John Breyault of the National Consumers League, the Giuliani Home Title Lock ad is “at best inaccurate. Title lock is a monitoring service. The majority of consumers don’t need it. I don’t think it’s a big crisis.”
John F. Wasik / RealClearInvestigations
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Reposted with permission