Many of you have probably heard alarming advertisements about title theft on the TV, the radio, and even seen it on social media. It does indeed sound scary – but can thieves steal your home and sell it without your knowledge? The short answer is no.
Although these messages play to our fears…” You may already be a victim”…, the offer of title theft insurance is not going to protect you in the way the ads claim. The services provided are a monitoring service and let you know “they’ve caught someone in the act of stealing your title”. The details on how the monitoring works are extremely vague and the likelihood of any service having access to every single repository of public land records are doubtful at best.
The truth is that these ads present an extremely unlikely scenario and are preying on people’s fears as well as a lack of understanding of real estate law. As the owner of a title and insurance company, as well as a real estate attorney, I can with confidence state that the law is on the homeowner’s side. Here is what is critical to know.
- A forged deed is not valid and conveys nothing. Someone accepting a forged deed, whether a buyer or a mortgage company, acquires no legal interest in the property. And while you may incur legal fees to defend your ownership interest from a duped buyer or mortgage company, the title monitoring service does not cover these fees. Only an Enhanced Owner’s Title Insurance Policy issued by a licensed title agent in the state where the property lies covers these costs.
- A transfer of ownership of real estate can only be done by a deed or a will, both of which are written documents with signatures witnessed by a notary public who is required by law to verify your identity either by actually knowing the signor or verifying identity with picture identification.
- All mortgage lenders and most buyers want title insurance. The process of obtaining title insurance involves multiple lawyers of due diligence including a detailed search of the land records and a heightened level of scrutiny when notarizing documents. It would be difficult to dupe a potential buyer or lender who exercises any reasonable amount of due diligence. A naïve buyer who pays cash and foregoes title insurance would be the loser in a battle with the true owner regardless of how sad their story sounds.
- Forgery is a felony in all 50 states, punishable by jail time and heavy fines meaning only the hardest of criminals would likely undertake despite the ads making it sound like its an everyday occurrence.
Title insurance is critical and required for this reason – to shield homebuyers against defects in the title, fraud, and forgery. The Enhanced Owner’s Title Insurance Policy will even protect the homeowner in the event of fraud or forgery occurring after they become the owners of the property. If you still have questions about title insurance, title fraud, or anything related, please reach out and contact us. We value being resources and educators to our clients and the community at large. Read more about Enhanced Title Insurance and how that could provide additional protection here.
Jeff Nowak
Cobalt Settlements is a locally owned, independent title and settlement company, headquartered in Arlington, VA. We are homeowners just like you. Whether it be custom, spec home – new construction, previously owned, a lot purchase, single-family, condo, or townhouse, we have done it too. We know what it takes to get through this process successfully. We pay attention and watch the details to protect you in insuring and closing on your dream. It’s the Cobalt Way, we believe in being the best, not necessarily the biggest. We specialize in real estate closings in Virginia and the District of Columbia.
