What is property fraud?
You may know that criminals can steal identities, hack devices, and withdraw finances, but were you aware that they could exploit your property as well?
Property fraud involves the stealing or misrepresenting ownership of a property for financial or personal gain. By exploiting weaknesses and loopholes in legal documentation or public records, criminals can take advantage of the very house you live in—This leaves a person stuck cleaning up any mess the criminals left behind.
So, before criminals put your house up for sale, let’s go over some popular forms of property fraud and steps you can take to start protecting yourself immediately.
Common types of property fraud
Rental Fraud
Criminals advertise property listings for addresses they don’t have any connection to or ownership of and try to trick individuals who are desperately looking for a house or an apartment into giving them upfront deposits or rental payments. According to the FBI, in 2021, 11,578 people reported losing $350,328,166 due to these types of scams which is a 64% increase from the previous year.
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Housing Loan Fraud
Fraudsters can impersonate homeowners and attempt to apply for various housing-related loans. They typically aim for loans that will result in direct payouts, such as home equity lines of credit or reverse mortgages. These loans are mainly targeted at elderly or wealthy individuals who have already paid off their mortgages. The more equity the homeowner has, the more the criminals can “borrow”.
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Title Fraud/Deed Fraud
Criminals can try to add themselves to the property or take over ownership completely. Filing quitclaim deeds, forging notarizations, and submitting files electronically could allow criminals to co-own property without the original homeowner even knowing. From here they can try to apply for another mortgage or make an effort to sell the property to any unsuspecting/desperate buyers.
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What’s the risk?
It goes without saying that most fraud has the potential to do financial damage, but the issue with property fraud is the amount of logistical and legal outcomes that can come as a result of being a victim.
Financial Risk
It is EXTREMELY important to catch property fraud as soon as possible to minimize the potential damage and losses as a victim, especially when you’re dealing with the amount of money involved in mortgages or HELOCs. The longer the fraud goes undetected, the more difficult it may be to undo the harm that has been done.
If these lines of credit go unreported for too long, you could be held liable for some if not all of the payments/stolen equity, especially if you don’t know the proper channels to take when recovering on your own.
Credit Risk
Fraudulent inquiries and new credit accounts can wreak havoc on a person’s credit history. Removing any of these fraudulent loans and purging debt can turn into a major headache. Speaking to multiple credit agencies and lenders for countless hours, gathering the proper evidence, and finding possibly needed legal help can drain a person’s time and finances.
What can you do to protect yourself?
Fortunately, there are a fair number of options when it comes to protection against property fraud, most of which are completely free and available to the public.
Property Fraud Alerts
Our government is thankfully (somewhat) aware of property fraud as a threat. Many counties around the nation are starting to offer an alert system that notifies users about any changes made to a property’s documentation. This could be the deed, title, mortgage, or any other relevant document that’s filed with the county.
All you have to do is provide an email, name, business name, or address, and you’ll receive an email whenever changes are made.
Each county’s method of alerts is different, as some may allow business names and others may not, but the general idea is the same.
If you want to see if your county/city offers property fraud alerts, simply search “Property Fraud Alerts” followed by the name of the county/city where your residence is located, and it should be on the county clerk’s website.
Having trouble finding the alerts for your county? Here’s a list of every county that offers the program separated by state.
Credit Freeze
Credit Freezes will minimize the risk of criminals getting approved for any type of housing-related loan. They can still apply for the loans, but their chances of being approved or the loan having any effect on your credit is negligible. You’re also protected on a federal level in the event that the freeze isn’t successful in stopping them.
Credit Freezes are completely free, take minutes to set up, and protect you from every other type of credit fraud. If you are concerned about protecting yourself and your credit, we can show you how to put freezes in place here.
Still have questions?
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