Recently, one of my friends decided to replace a sagging, aged roof. She had no idea that seemingly mundane choice would turn into a months-long odyssey of paperwork, including a risk that she’d lose her house.
In applying for a home equity loan, she found out that an identity thief had not only taken out one already, but also had a second mortgage application in process. As it turns out, her buckling roof wasn’t the only danger to her home.
Although my friend got the situation sorted out, the damage could have been devastating. People can be diligent about checking bank and credit card transactions daily, but who worries about “house stealing”?
Mortgaging Your Good Name
Mortgage fraud through identity theft is a rare but very real risk. A thief can steal your Social Security number and other identifying details, then pose as you to a bank or mortgage broker. The criminal might refinance your home for more than what’s owed, and then take the extra cash or obtain a home equity line of credit and drain that account.
In some cases, you can experience house stealing through a fraudulent deed transfer. An identity thief could use stolen information to execute a transfer, which would put your property in his or her name. That means you’d legally no longer own that real estate. Since the criminal’s name is on the deed, he or she would have the right to take out loans against the house. With no payments made on those loans or the mortgage, the property could even go into foreclosure.
Thieves can get the information they need for these transactions by stealing your mail, getting personal details through fraudulent phone calls or making copies of your driver’s license to impersonate you. Unfortunately, sometimes it’s friends and family who are the culprits, since they may have access to files inside a home and often know many of the personal details required to impersonate you.
Protect Yourself from House Stealing
Although house stealing isn’t as prevalent as credit card fraud, it should still be on your radar. As the owner of a house, condo or vacation home, you need to stay vigilant to make sure your property is protected from identity theft ([tweetthis]As a homeowner, you need to make sure your property is protected from identity theft.[/tweetthis]). Here are some tactics to keep in mind:
- Secure your files. Financial records are still vulnerable if they’re sitting in your drawer at home. Friends, family members, contractors and visitors could go snooping. That’s why it’s crucial to lock up your papers so they’re safe.
- Don’t give out information over the phone. Caller ID spoofing scams have become very sophisticated. Callers manage to persuade people that it’s a legitimate information request or that money is owed for taxes or bank fees.
- Check your credit report regularly. At least twice a year — and more often if you’ve been an identity theft victim — look carefully through your credit report to identify any discrepancies or credit inquiries that you don’t recognize. If several mortgage companies are looking at your file, for example, that may signal someone is trying to obtain a home equity loan in your name.
If you see any red flags, call your mortgage company or bank immediately. They can start a fraud investigation that can shut down scammers and provide a solid record of your efforts to thwart the thieves.