The digital age is all about convenience and accessible information. But with these benefits also come more opportunities that allow people to steal information for fraudulent purposes. In our recent livestream with top-ranking Arizona realtor, Cassity Trexler of the Trexler Team, we discussed home title theft and how to protect yourself from it.

We at Rilus Law consider this issue critical because, in estate planning, one’s home is often the biggest and most common asset included in one's estate. You need to be aware of home title theft so that you can take preventive actions or deal with it if it happens to you.

What is Home Title Theft?

Home title theft, also called deed theft, deed fraud, or title fraud, is the instance when a person steals or unlawfully gains access, and takes control over the title of a property belonging to another person. A person can steal a home title by forging signatures on the property deeds and transferring the property ownership to their name. As the new owner of the property, the perpetrator can use the stolen title to sell the property or take out loans or mortgages without the original owner’s knowledge or consent. Commonly, they will take out a home equity loan on your property.

What are the Consequences of Home Title Theft?

Is home title theft a real problem? While it may not be as common as credit card fraud, this type of real estate fraud is a real problem! As discussed in the video, Cassity Trexler had a client experience title theft just this year (2024). She found out through other realtors that someone was trying to sell her client’s vacant land without their knowledge or consent. Luckily, they caught it early enough to prevent any financial implications, but that’s not always the case. Below are some of the most devastating consequences when someone steals your house title without you knowing.

Financial Losses

The victims of home title theft are responsible for the loans and mortgages the perpetrator takes out against the property. In addition, the victims have to spend money on legal fees, titling expenses, and other costs to resolve the situation.

Damage to Credit

Often, victims find out too late about their property being fraudulently used. That is when there are already missed payments or defaults on loans under their name. As a result, their credit scores are negatively affected, lowering their chances of obtaining good interest rates for purchases in the future.

Legal Complications

Resolving home title fraud involves complex legal proceedings requiring expensive fees and time. Victims may need to file multiple lawsuits depending on the specifics of the property title theft and there are no guarantees of success on the outcome.

Stress and Anxiety

The victims of home title theft undergo mental and emotional stress from the disruption and violation of their peaceful life. Aside from dealing with the steps to resolve the issue, they also have to deal with the possibility of losing their property, further increasing stress and anxiety.

How to Prevent Home Title Theft

The good news is that there are several proactive measures you can take to protect your home title from theft:

1. Title Alert

As we discussed with Cassity, Arizona’s response to the dangers of home title theft is the law that will take effect on January 1, 2025, stating that all counties are required to have a title alert system. This system notifies title owners when any documents are recorded in their name. This way, owners can deal with unauthorized title use immediately and prevent dire consequences.

Here are the links to some of Arizona’s title alert systems:

The systems for other counties are yet to be published as the Title Alert Law is not in effect until next year. Regularly check your county’s official websites or visit their local offices for updates.

2. Credit Freeze

Freezing your credit is another valuable preventive measure. This method is where you notify the three major credit bureaus to put your credit on hold, thus making it difficult for home title thieves to run credit under your name. Whenever you legitimately need to open new credit cards or apply for a loan, you simply unfreeze your credit. Freezing and unfreezing your credit is a free and easy method that adds extra protection in case your home title gets stolen.

3. Secure Document Storage

Prevent identity theft by safeguarding your personal information, such as Social Security numbers and property documents. Use a safe deposit box for physical documents or secure electronic storage with strong encryption for digital documents. Also, a paper shredder is a wise investment to properly dispose of mail or documents with private information.

4. Title Insurance

Title insurance is required in every property transaction in Arizona. Depending on the policy terms, title insurance protects you from financial losses, unauthorized liens, and mortgages resulting from title theft. Some policies can also cover assistance with legal proceedings and financial reimbursements for costs resulting from home title theft.

Review and update your title insurance policy regularly to ensure that your title insurance offers the best protection. In our years working with trusts and related estate planning tools, we’ve come across numerous instances where title insurance failed due to transfers of ownership. Always check with your title insurance company and title company when transferring ownership through trusts or other methods.

Protect Your Real Estate with Rilus Law

Protecting your real estate from title theft is crucial in safeguarding your financial well-being and peace of mind. In the realm of home title theft, misinformation runs rampant, often leading homeowners to invest in unnecessary and costly services promising protection. Many fall prey to the allure of title theft insurance or home title lock programs, believing they offer comprehensive security against fraudulent title transfers. However, the truth is that these paid services often provide no more protection than the free service offered by county title alert systems.

It's essential for homeowners to discern fact from fiction and recognize that the most effective defense against title theft lies in proactive measures such as utilizing county title alert systems and implementing sound security practices. Don't be swayed by slick marketing tactics—empower yourself with accurate information and take advantage of the resources available to safeguard your home title without breaking the bank. That’s where we come in. At Rilus Law, we specialize in estate planning and asset protection. Don't wait until it's too late—contact Rilus Law today to fortify your defenses and secure your legacy for generations to come.

All You Need to Know About Home Title Theft and Arizona’s New Title Alert Law