You may have seen the ads or heard the buzz about companies offering title monitoring services or “title theft protection.” Are they legitimate or just a scam? Is there any real value in these services?
First, let me clarify that “title
coverage” offered by some of these unregulated companies is not title
insurance. They do not actually protect you from fraud, title thieves,
scammers, etc. Their standard service does include taking any actions
regarding the rightful ownership of your property.
What is Title
Theft Protection?
Monitoring services like Secure Title
Lock and Home Title Lock offer subscriptions that say they will alert you to
court filings affecting your home’s title. For $100-150 a year, they will
monitor court records to show title fraud or theft. The “protection” they offer
is basically a notification that someone has changed the ownership or deed to
your property.
“Title theft” is a fairly new term
that has generated a handful of companies feeding on consumer fears. These
companies suggest that criminals can “steal” your property by forging your name
on a deed, then resell the property or take out a mortgage loan against it.
They claim a title thief can stick you with a debt that isn’t yours.
That isn’t true. Though a title thief
or forger could attempt to steal your home, the consequence is actually a lot
of headaches and legal hassles for a property owner. Proving and dealing with
fraud can be time consuming and expensive. Title theft protection
services are meant to be proactive in helping you shut down mortgage fraud.
The benefits of a title monitoring
service are ambiguous. They are only designed to alert you to a change in your
title. They don’t prevent the fraud and they don’t actually help you deal with
it if it happens. A title theft monitoring service will not help to clear or
correct a title. They have no legal obligation to assist the owner with a title
theft and they don’t offer protection against financial losses. That’s what
home title insurance is for.
What is Title
Insurance?
Title Insurance protects the owner and their lender from the possibility
of someone contesting their ownership of a property. When buying or refinancing
a home, you need a title insurance policy if you are closing at a title company
or getting a mortgage loan. The title insurance premium paid at closing
protects you for the entire time you own the property.
Title insurance not only protects you
from financial loss, it requires the title company to legally defend you if
your ownership is ever challenged. However, it insures against issues on the
title when you purchase the property. It doesn’t cover future criminal
incidences.
How to Protect
Your Home Title
You don’t need to pay a company to
protect you from thieves putting their names on your home title. You can easily
monitor your title yourself for free. Just go to your county’s tax web site and
periodically check your property record. Ensure that it shows your correct name
and address.
If you discover that your property
ownership has been fraudulently changed, contact an attorney. The county clerk
at the property recording office can also advise you on filing a notice
affidavit with the county court. [where: 75230]
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