Can Someone Really Steal Your Home All Online?

Written by Posted On Thursday, 08 July 2021 00:00

I’ve been hearing the occasional advertisement about how easy it is to steal your home without you even knowing about it. Companies announce protection against ‘title thieves’ as an insurance policy. The process they claim is relatively simple and silent. The bad guys are able to get a blank Quit Claim deed and go about forging signatures, enter the amount of ‘consideration’ or the transfer price and filing fee and even forge the notary stamp. Different states will have slight variations on this theme, but this is how they claim it works. 

Everything on the deed transfer is fake. The notion is that ownership is stolen from you, the new ‘owner’ then proceeds to take out several loans against the property and not paying them. Soon, your mortgage company contacts you and says you haven’t made any new payments on the new equity loans and suddenly you’re in foreclosure. Without you ever having known about any of this. Far-fetched?

I think so and let me tell you why. Yes, it’s relatively easy to get a blank quit claim deed. And yes, it’s easy to fill in the blanks and forge signatures. Your actual title is downloaded, your signature scanned and pasted on the deed transfer. So far it sounds a little scary, right? It’s supposed to. 

And the insurance policy covering such theft is relatively cheap, especially so when compared to the value of your home. But property transfers can’t take place only in the digital world. In this scenario when the title was transferred showing you no longer own the property, you’re going to get a formal notice in the mail along with your copy of the transfer showing that you owned the property but gave it to somebody else. You get a copy of this notice and the wheels start to turn.

You likely have a title insurance policy on your home. And, unless you paid cash for it, mortgage companies won’t issue funds without a title insurance policy in force. Even if you paid cash for the home, there is still a title policy the sellers provided. With this type of policy, the sellers are protected in the event of any ownership shenanigans up until the point of transfer. After, there is a buyer’s policy offering protection from the point of transfer moving forward. You will know about all of this. While one could possibly forge a notary seal, real property transfers must be witnessed by the notary. 

Next, taking out home loans on the property after the transfer doesn’t really make sense when new lenders come knocking at your door letting you know you’re being evicted due to non-payment of these new loans. Again, new liens against real property need to be witnessed. Have you ever taken out a mortgage or home equity loan and not have had to present photo IDs to prove who you are? Further, have you taken out a mortgage or equity loan and not have the transaction notarized? The notary verifies your identity with two separate forms of ID, witnesses your signature and asks that you sign your signature in the notary’s notary book? No. You didn’t. 

And one last thing, if someone else did in fact go through all this process, how could they take out a loan with your name on it? It doesn’t make sense. The bad guys can’t take out loans and have you forfeit the property due to nonpayment of loans that don’t have your name on them? There are plenty of scams out there, just don’t be fooled with this one.

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David Reed

David Reed (Austin, TX) is the author of Mortgages 101, Mortgage Confidential, Your Successful Career as a Mortgage Broker , The Real Estate Investor's Guide to Financing, Your Guide to VA Loans and Decoding the New Mortgage Market. As a Senior Loan Officer and Mortgage Executive he closed more than 2,000 mortgage loans over the course of more than 20 years in commercial and residential mortgage lending. 

He has appeared on CNN, CNBC, Fox Business, Fox and Friends and the Today In New York show. His advice has appeared in the New York Times, Parade Magazine, Washington Post and Kiplinger's as well as in newspapers and magazines throughout the country. 

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