Can Someone Steal Your Home?

Q:    I worry about identity theft.  Should I buy home title protection?

A:    "Home title protection" is a product sold by various companies, some of which claim that stealing your home's equity is "easier than stealing a car and more profitable."  I beg to disagree.

    How does home title fraud work?  A criminal drafts a deed to your home transferring it from you to him (or an alias).  He forges your signature, obtains a fraudulent notarization of your signature (either from a notary who is in on the scam or using a stolen or fake notary stamp), and transfers title to himself.  He then borrows as much as he can on the property and disappears.  You don't find out until you, as the occupant, receive a notice of foreclosure.  To help increase the amount of time before an owner learns of the problem, thieves often target vacant properties and vacation homes.

    This scam as been around for a while.  In 2008, the FBI issued a notice called "House Stealing The Latest Scam on the Block," and it hasn't stopped yet.  In 2017, there were an estimated 9,600 victims of title fraud schemes.  In response to this type of activity happening in the Chicago area, the legislature amended the Illinois Notary Public Act to require notaries to obtain the right thumbprint of people transferring title to residential real estate in Cook County after June 1, 2009.  In addition, Cook County has a free property fraud alert program.  Owners can sign up for alerts at https://www.cookcountyclerkil.gov/service/property-fraud-unit.

    Illinois also amended the Illinois Criminal Code, effective January 1, 2014, to create a felony offense resulting from the creation of a cloud on title that has a value in excess of $10,000.  A "cloud on title" is defined by the statute as "an outstanding claim or encumbrance that, if valid, would affect or impair the title of the owner of an estate in land and on its face has that affect, but can be shown by extrinsic proof to be invalid or inapplicable to that estate."  The offense was previously a Class A misdemeanor.

    But does a forged deed actually transfer title to your home?  A forged deed is void and cannot transfer title to real property.  That being said, it can still create a huge legal mess.  In order to reestablish title in your name, you will need to file a suit to quiet title.  You will need to prove that the deed was forged (which may not be too difficult if the notary does not exist or there are other egregious factors).  You most likely will not lose title to your home, but you will have legal fees (possibly significant) and aggravation (sure to be significant).

    So, what can you do to prevent title theft?  First, open all of your mail, and if there is anything to do with your property, read it.  Pay attention to your property tax bill.  If your property is in Sangamon County, you should have recently received your 2020 property tax bill.  If you did not, call the Sangamon County Assessor's office, or look up your property online to verify the property is in your name at: https://tax.co.sangamon.il.us/SangamonCountyWeb/app/searchByParcelNumber.action

    You can also buy title protection from several companies.  The cost is generally $100 - $150/year.  But be aware what you are purchasing.  Some products are for notification only.  If a deed or other document is filed with respect to your property, you will receive notice fairly quickly.  It will be up to you to act to stop the fraud, possibly with the help of the protection company.  Other products cover a certain amount of legal expenses to fix the problem.  As with all insurance products, the details are in the fine print, so investigate the product carefully.

This article is for informational and educational purposes only and does not constitute legal advice.