Title Lock Insurance is a waste of your money
We’ve all seen the television ads:
"The FBI SAYS YOU MAY NOT OWN YOUR HOME. Home Title theft is a serious cyberthreat and growing problem that can and will affect you. Save yourself and your home - with TITLE LOCK."
But do you really need this? And if you do, what are you getting?
Here to help us understand the threat to your home’s title is our own FOX 5 real estate expert John Adams, who, in full disclosure, is himself a homeowner.
Q: What is this TITLE LOCK thing all about?
A: It’sa clever combination of terms that sound important, but that present no threat to the vast, vast majority of american homeowners.
Q: But John, I have heard you say many times that the title to your home is a vitally important document that proves you are, in fact, the owner. Why wouldn’t you want to protect that?
A: You do, but this product is not going to do anything for you.
Q: How can that be? Isn’t this just like title insurance?
A: No, it is nothing like title insurance, but the promoters want you to believe it is. Title insurance is a one-time purchase that protects you or your heirs against any claim against the validity of your ownership prior to the date you bought your house.
Yes, that is important and I always strongly recommend that every buyer purchase this coverage. But this title lock is totally different.
Q: So what’s the difference?
A: Title Lock claims to protect you against TITLE FRAUD, not a legitimate claim. Under TITLE FRAUD, a scammer forges your name on a deed, then files it in the records room of your county courthouse, then takes out a loan, using the home as collateral.
Q: Can that happen?
A: Yes, it is a very rare but growing scam.
Q: So, in that case, if I no longer own my house, would I have to leave my home?
A: No, because you still DO own your home. The new scam owner obtained his claim to ownership by a FRAUDULENT deed. He would have to prove that your signature on that deed is valid and that YOU signed it. You didn’t!
Q: Then what happens?
A: Well, the technical term of what happened is FORGERY IN THE FIRST DEGREE, and shall be punished by imprisonment for not less than one nor more than ten years.
Q: But what about if he took out a mortgage using the property as collateral? Don’t you still have to pay that?
A: No,
the scammer never legally owned your house, so the lender has no legal claim on your property. If they tried to foreclose, that would be considered “wrongful foreclosure.”
Q: So who pays back the money to the lender?
A: Well, in an ironic twist, the lender probably required the scam borrower to pay for LENDER’S TITLE INSURANCE to protect the lender against fraud just like this. The title insurance company would probably have to eat the loss, then try to recover against the scam borrower.
Q: So, if I buy TITLE LOCK insurance, how does that protect me?
A: It doesn’t. First, it’s important to know that TITLE LOCK is not insurance of any kind. It does not protect you in any way from a scammer fraudulently transferring your title.
Instead, TITLE LOCK is a deed monitoring service that periodically checks to see if title has been transferred OUT of your name. If it has, they notify you AFTER IT HAS HAPPENED. They offer NO assistance in solving any problems that may be created.
Second, you can’t LOCK a title in Georgia or any other state I have looked at. Anybody with a pen and paper can fill out a blank deed and forge your name to it, then file that deed at the courthouse.
If that happens, the law assumes you will act eventually to protect your ownership, and charge the scammer with FRAUD.
Q: OK, but how would I find out that it has happened?
A: A pretty good indication would be when someone knocks on your door and says they are the owner of your house and you must leave. At that point, you would call your attorney and justice would (eventually) prevail.
Q: Isn’t that going to be expensive?
A: It is much less expensive than losing ownership of your house to a scammer.
Q: Does this type of thing actually happen?
A: Yes. It is particularly targeted against the elderly, those who may not understand their rights, and against those who are trusting souls. It is most successful against those who own their home free and clear of debt.
Q: So, in your experience, is there ANY value to a TITLE LOCK service? It only costs about $15 a month?
A: It is NOT a LOCK, nor is it INSURANCE, it is a periodic monitoring service that offers you no assistance whatsoever if someone uses forgery to try to steal your title.
In most counties, you can access the county property ownership records online free of charge and check for yourself. In my opinion, it is simply a totally unnecessary expense.
THE BOTTOM LINE:
Companies that offer TITLE LOCK services are fueling, then preying on fears that someone is going to “steal” their home from them. The reality is that attempted title theft is quite rare, and is always unsuccessful, provided the true owner keeps an eye on his or her property.