Recently, frantic ads have warned that thieves can record forged documents to steal title to your home. While title theft insurance companies claim to offer protection to homeowners, there are a few things to consider before purchasing a policy:
- A forged deed is illegal and does not convey title. A lender that grants a mortgage based on a forged deed does so at its peril and must look to the scammer (not the homeowner) to recover the loan proceeds.
- Victims of title theft will incur expenses to clear their title. Unfortunately, most title theft policies do not reimburse policyholders for costs or legal fees. Those policies that offer reimbursement exclude from coverage costs for which a third-party (such as the scammer) is found liable. If a policyholder obtains a judgment against the scammer, the policyholder must attempt to recover their costs from the scammer, who is likely to be judgment-proof.
- There is no way to “lock” title to your home. The Register of Deeds must record any document that complies with the statutory requirements. It does not verify the details of the underlying transaction or that the signatures on the document are genuine. Title fraud insurance companies periodically check for new entries in the chain of title. However, they cannot prevent fraudulent conveyance from occurring. They notify the homeowner only after a fraudulent conveyance occurs.
Thankfully, homeowners in many counties (including Wayne and Oakland) can monitor their title for free by signing up to receive a notification every time a document is recorded.
If you’re concerned about the title of your property, give us a call at 248.477.6300.