Title insurance goes beyond simple monitoring for complete protection

Most of us have heard the Home Title Lock (HTL) commercials on TV. Title or home lock companies are advertising monitoring services for home title (deed) theft. The commercials are designed to alarm homeowners of a real but fairly uncommon threat to your financial security. In one of the newer attempts at fraud, thieves target vacant homes, second/vacation homes, rental properties and homes with a lot of equity such as those owned by seniors who are the most vulnerable. With enough information, they can fraudulently transfer the deed to themselves or a third party at which time they can sell the home or borrow against it to reap a profit. Once this is discovered, homeowners face a painful and stressful process of proving they own the home as well as the cost of legal fees. Eventually, the real homeowner will prevail as a forged deed will not hold up in court, but no one wants to have to deal with this difficult and costly situation.

So, what exactly is a title lock service? To be clear, it doesn’t “lock” your title. It is a monitoring service and not insurance. The consumer is charged a monthly or annual subscription fee for the service. Title lock companies monitor land records for transfers of deed on your property and send an alert if transfer of ownership is found. You are notified after the damage is already done. These services don't cover attorney fees or aid you in the onerous process of clearing the fraudulent transfer.

If your home is a desirable target for criminals (such as one of the situations above), a much better option would be to purchase an enhanced owner’s title insurance policy that provides post-policy protection for forgery and impersonation. There is a nominal increase in cost over the standard or basic owner’s title policy which protects against past claims or defects up to the date of deed recordation, but it offers much greater protection. Additionally, and of important note — both types of owner’s title insurance only require a one-time fee — not continuous and indefinite payments that add up over time. Although not required, buyers normally purchase owner’s basic title insurance when they settle on the home. If you currently have a basic policy, you may be able to upgrade it to an enhanced homeowner’s title policy. The bottom line is — purchasing an enhanced homeowner’s title insurance policy is the best protection against home title theft that occurs after you take possession of the deed.

So what else can homeowners do to protect themselves? There are several ways to determine if your deed has been stolen including:

1. Check your credit report regularly. A sudden drop in your credit score may indicate fraud.
    
2. Watch out for “phishing” and other cybersecurity threats in which criminals attempt to lure you into providing personal or financial information.
    
3. If available, sign up for free deed transfer alerts through your county’s recorder of deeds department. In some counties, you may search records online yourself if your county doesn’t offer free alerts.
    
4. Be aware of missing real estate tax bills. Your local tax office indexes public records and sends bills to the vested owner in the state.
    
5. Pay attention to missing utility bills. A true title thief would likely have the electric, gas and water bills moved to a new name and address. Also, notices of unpaid bills may indicate a fraudster claimed your home and isn’t paying the utility bills.
    
6. Visit unoccupied property frequently to check for evidence of activity such as someone living there or a “For Sale” sign in the yard. If you are deployed or on an extended vacation, a trusted family member or friend may be able to assist.
    
7. If you receive a notice of foreclosure or someone knocks on your door saying they own your home, immediately report it to your county’s recorder of deeds office and local and federal law enforcement.

If you have questions about whether enhanced title insurance is appropriate for you, please feel free to contact us.