Home Title Protection: Do You Need It?

To many of us, our home is our most important asset. It’s a roof over our heads and, especially as we get older, its appreciated value is often one of the pillars of our plan for a secure retirement. So, if you’ve seen advertisements for home title protection, you may wonder whether you should have this service. As the ads say, if thieves can steal your home in minutes, isn’t it worth “only pennies a day” to protect it? Following up on questions from IDX members, we delved into this crime, called “deed theft,” and what you get with home title protection. Here’s what we found.

Despite home title advertisements that proclaim thieves can steal your home “in minutes,” deed theft is a complex and time-consuming crime. It is true that where property deeds are publicly accessible online, anyone can pull a copy. But, to actually commit deed theft, a criminal then has to forge a transfer deed and file it with the county to register the title to the property in their name. If there is a mortgage, they also have to forge a discharge of that mortgage before they can take out loans against the value of the property or, in rarer cases, try to sell it…in other words, it’s no small task!

More commonly, criminals attempt to scam homeowners into handing over personal information or unwittingly signing away their property. All of this requires stolen personal information, so identity theft is typically a part of this crime.

Deed theft most often targets older people, who are likely to have more equity in their homes or own them outright. Thieves may target second homes or vacation homes, in hopes that the owner isn’t paying close attention to mail delivered there. Deed theft is also more common in areas where property values have risen sharply, and long-time homeowners may be less skeptical about signing documents in return for a fraudulently offered reverse mortgage or other benefit.

It all sounds scary (and it is). But according to experts, deed theft is not that common (whew!). Title protection ads imply homeowners losing millions of dollars a year on this crime, but stats that are being quoted from the FBI include all kinds of real estate-related crimes. While deed theft may spike in certain areas, as mentioned in this press release from the New York Attorney General’s office, experts say it isn’t a common form of real estate fraud.

Also, deed theft does not legally transfer ownership of your property because a forged deed isn’t legally valid. That said, attorneys acknowledge that a homeowner may have to file a lawsuit to clear their title.

So, does title protection prevent deed theft? In a word, no. Title protection is basically a monitoring service that, for around $15 a month, checks the public record periodically and sends you an alert if there are new deeds, liens, loans, court findings, etc. against your property. The monitoring is advertised as 24/7, but counties don’t typically update public records on nights or weekends, so that’s not a real benefit. Although the product names have words like “lock” in them, title protection doesn’t lock down your title the way a credit freeze would lock your credit report. And they are not insurance: they don’t cover the legal costs of clearing your title if deed theft happens.

In fact, you are as capable of fighting deed theft as any monitoring service. Here’s how:

• Monitor the deed yourself. If deeds are online, your county website may have specific instructions for checking them or you can visit the county courthouse or assessor’s office. (Here are some general instructions to get you started.)
• Check your credit report regularly and consider an identity protection plan to help protect you against identity theft, which can lead to title theft.
• Monitor your bills. If you stop receiving utility or mortgage bills on a property you own, contact the issuer right away. It could be a sign that someone has switched the title. Conversely, if you receive a notice of an unexpected lien or other property debt, investigate right away.
• Make sure your mail is picked up daily when you’re away or if a property you own is vacant.
• If you do own a vacant property, hire a security service to watch it or visit regularly to check for unauthorized inhabitants.
• Find out if your county offers a free consumer notification service. If they do, register to receive alerts any time a document is recorded on your property.

Finally, if you care for older family members who you think might be vulnerable to scams, keep an eye out for problems their homes. It might be very hard to reverse if they were tricked into signing their property away.

If you still aren’t sure whether you need title insurance, here’s the question to ask yourself: Is it worth $15 a month to have someone else check the county records for you. It won’t prevent deed theft, and it won’t pay your legal expenses if it happens, but it’s always possible that an early warning might help you limit the damage. Bottom line: if it gives you convenience or peace of mind that’s worth the money, you might consider it.