Are title protection services worth the expense?
Real estate scams cost consumers $350m in 2021.
As if there aren’t enough scams to worry about, advertisers are warning homeowners about the threat of home title theft, when a fraudster attempts to transfer ownership of a home by forging a deed in the owner’s name. You may have even seen ads touting products that will protect you from thieves stealing your home out from under you — scary spots warning about identity theft and maybe even featuring celebrities.
Not so fast.
Yes, home title theft, a form of identity theft, is a thing. It’s one example of a real estate scam, and, according to the
FBI’s Internet Crime Complaint Center, there has been an increase in losses due to real estate and rental scams over the past few years. In fact, the FBI Boston Division, which includes all of Maine, Massachusetts, New Hampshire, and Rhode Island, issued an alert in July 2022 warning the public about the risk of rental scams and the need to be cautious when posting or responding to rental property ads and real estate online. However, out of all the types of property crimes — 11,578 people nationwide reported losing $350.3 million due to these scams in 2021, the FBI reported — only a small portion were related to titles purportedly being stolen.
Richard Howe, register of deeds of the Northern District of Middlesex County, in Lowell, said his office has gotten a lot of calls from people who have seen ads on TV and are concerned about someone stealing their title. “There are a lot more ways that somebody can take advantage of people other than stealing their title,” Howe said. “I took office as the register of deeds on Jan. 5, 1995, and I’ve never once encountered a case where that happened — where some person unknown to the homeowner steals the title to their home.”
He has seen cases, however, in which a family member or caregiver of an older adult has forged a signature or exerted undue influence to try to steal a home. “But there’s not a plague of those things happening either,” he said. “The allegations are far greater than the actual facts.”
Justin McCarthy, a real estate attorney in East Longmeadow who does closings and has examined thousands of titles in his 13-year legal career, also said he has never seen a single instance of home title theft in Massachusetts.
“The real threat is wire fraud, which is super-prevalent,” McCarthy said. That’s when a scammer poses as a real estate agent, title company, or closing attorney and attempts to divert the closing costs of a home buyer to a fraudulent account, usually via an e-mail or phone call. According to the National Association of Realtors, real estate wire fraud is one of the most common cybercrimes in the United States, with 13,638 victims in 2020 and losses of more than $213 million, according to FBI data.
It’s important to remember that a fraudulent deed in Massachusetts does not actually convey title. “A forged deed is void,” Howe said. “It cannot convey anything.”
The good news: Even if you are the victim of home title theft, you still legally own your house. The bad news: You’ll probably have to deal with a mess to clean up — much like identity theft — and that will probably involve time, stress, and attorney’s fees.
But there are things homeowners can do to protect themselves.
Many registry of deeds offices in Massachusetts offer a free Consumer Notification Service, which notifies homeowners by e-mail whenever a new document is recorded that affects their property. Owners can register up to three residential properties, but commercial properties are not eligible. To see whether your county offers the free notification service, contact your local registry. A list is available at Masslandrecords.com.
Howe also recommends that homeowners regularly check the website of the registry in which their deed is recorded to make sure no unusual documents have been recorded. “It’s the equivalent of Googling yourself,” he said.
Concerned homeowners can also enroll in a service like HomeLock, which says it protects against property theft (title, deed fraud, and forgeries), equity theft (fraudulent loans and lines of credit), rental theft, clouded title, lien filings, and more by monitoring your title, parcel number, and property address daily.
“Consumers pay us to protect their home and the equity in their home,” said William McKenna, founder and chief executive officer of DomiDocs, the Stuart, Fla.-based company that offers HomeLock.
McKenna said that coverage includes data correction services, plus $100,000 worth of legal fees for fraud defense and $1 million of cyber-insurance coverage, so HomeLock will actually help scammed homeowners cover the cost of undoing the fraud, rather than merely monitoring title like the free services some counties provide.
HomeLock costs $17.99 a month, or $99 a year, with discounts available for longer terms.
Also, while homeowners insurance doesn’t cover home title theft, according to Spencer M. Houldin, president of Ericson Insurance Advisors in Boston, your title insurance policy might.
According to Derek Massey, vice president and Massachusetts state manager for First American Title Insurance Co., a standard American Land Title Association policy protects homeowners for title defects unknown at the time they purchased the property. A standard policy doesn’t cover a homeowner for a deed forgery that takes place after the purchase. However, in Massachusetts, a First American Eagle policy would. “It’s an enhanced title insurance policy,” Massey said. “It provides protection against pre-purchase forgery and also contains coverage for forgery that occurs after you purchase your home for an instrument purporting” to transfer the title. Other title companies may offer similar coverage.
While the cost of title insurance varies based on the property type, location, and other characteristics, the premium on a hypothetical $500,000 home purchase with no mortgage in Suffolk County would be $1,825 for a standard ALTA policy or $2,000 for the enhanced Eagle policy, Massey said.
‘There are a lot more ways that somebody can take advantage of people other than stealing their title.’
RICHARD HOWE Register of deeds