Is it just me or do you find that there’s always a certain product or service being advertised, where that company bombards radio and TV with countless ads – then disappear after their initial splash? From “buying” a star and naming after someone, extended car warranties, tuning up your PC, and identity theft, some commercials are played too often.

The most recent example of this is Home Title Theft. Since it involves real estate, I thought it would be a great topic for this weekend. Can someone actually steal your home? The simple answer is yes, BUT, there’s a lot of caveats to that statement. We’ll get into the how, and let you determine your individual risk.

Let’s start with some facts I’m sure you may not be aware of.

Property information is public knowledge.
Every parcel of property has an associated parcel number. That’s how municipalities keep track of its ownership, value, and most important – tax revenue. You should also know that all this information is public and is accessible by anyone who wishes to view it. To be specific, anyone can research a parcel of land and find the owner’s name, their mailing address, when they bought the property and for how much, any changes in ownership (such as putting the property into trust), along with the assessed value, and current property taxes.

Mortgage documents are also public documents.
Because a mortgage is a document recorded against the title of a parcel of property, that document is also available for anyone to access.

If you want to know what your county is publicly showing about your home, here’s the links:

Oahu:
https://www.qpublic.net/hi/honolulu/search.html

Maui County:
https://qpublic.net/hi/maui/

Kauai County:
https://www.qpublic.net/hi/kauai/search.html

Hawaii Island:
https://www.hawaiipropertytax.com/search.html

Recorded documents are not checked prior to recordation.
This is the big shocker and should frankly worry you. When a document is presented to the Bureau of Conveyances for recordation against a parcel of land, that document is not scrutinized for its legitimacy. The only review done by the clerks is to make sure the document conforms to the formatting required by the State.

That’s right! Anyone can submit and record any document they wish against any parcel of property. As with any action, if there is malicious intent, it is a crime. But this ability to freely record documents is how the system works. If someone records a document against your property that is fraudulent or you disagree with, your only recourse is to go to court and have a judge issue a court order to the Bureau of Conveyances to remove that document.

But how does someone STEAL your property?
As with any document that can be recorded against your property, criminals can falsify a deed transferring the ownership of your property to another party. Remember, the bureau only checks to make sure the document meets the form requirements. They do not check to verify if the document is legitimate. And here’s a very important piece of information: the bureau won’t notify you of any documents recorded on your property. That means that someone could file something against your property, and you may not know about it for years.

The ideal situation for criminals and the focus of the ads for Home Title Protection is for those that own property free and clear. The scam is quite simple. The criminals record a bogus deed transferring the title of your property to another individual. That individual is most likely a victim of identity theft. The criminals use the stolen identity to apply for a mortgage on your property. The lender, now the 3rd victim in the scam, gladly provides a cash-out refinance to the new owner. The criminals make off with the money, never making a single mortgage payment. The lender, not knowing anything of the scam, dutifully tries to notify the owner (no you!) of the impending foreclosure. You may never find out that any of this has happened until the sheriff arrives to evict you from your property after someone new had purchased it at the foreclosure auction.

The good news is that if you have a mortgage on your property, and someone were to transfer title, that mortgage also transfers with the property. Until that lien is removed, it stays in place. Criminals don’t want to scam properties with mortgages. The reason being is that any new loan must be the only mortgage recorded against the property. That would require the criminals to qualify for and take out a big enough new loan to also pay off your existing mortgage. If they were to do that, you would get a notice from your existing lender congratulating you on paying off your loan! Part of the success of title theft is the delay in the current owner finding out anything. And while the damage has already been done in the case above, at least you would find out before the new mortgage were to go into default and have your home sold to another unsuspecting party.

Title Insurance doesn’t cover this.
When you buy a property, you have the option to purchase title insurance. That policy protects you against defects in the prior ownership chain. It does not protect you from any future changes in the ownership chain.

Title Insurance would help the person who bought your home through the foreclosure auction. That’s because there was a defect in the chain of title prior to the new owner purchasing the property.

What are the chances?
Home Title Theft is relatively new. Criminals are always looking for the next novel way to separate you from your money. In this case, your home may be the biggest asset you have. I have not researched the cost for the services offered in the commercials. I do know that they cannot prevent someone from falsifying a deed and recording it against your property. What they do provide is monitoring of your property and notifying you of any changes. And like identity theft protection, they provide legal assistance to help restore the property back into your name.

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