Tips to Prevent Homeowner Identity Fraud

By: Rose Mary Madrigal
Tips to Prevent Homeowner Identity Fraud

Homeowners regard their houses as one of their milestones in terms of financial assets. However, a home value can attract potential identity theft for homeowners which defrauds and exploits their victims. It is essential to know to prevent identity theft and to avoid and be prepared to handle these uncertainties especially when securing your residential real estate and offer peace of mind.

What Is Identity Theft

Identity theft is when an individual unlawfully uses your identity and alters the ownership title of your residence to their name, with the intention of obtaining your assets or property.

Identity theft is typically, the suspect must fabricate a convincing home deed to maintain the appearance of authenticity. Home title theft is done in various ways, which include:

  • Uses your identity to steal your money based on your home’s value
  • Access your credit line and leave a mountain of debt
  • Forge deeds to sell uninhabited real estate
  • Fake financing opportunities among homeowners who have financial hardships

Types of Identity Theft

Types of Identity Theft

Wire fraud

Wire fraud occurs during the final stages of a home purchase, where homebuyers, preoccupied with their last-minute tasks, fall prey to fraud wire transfers without notice.

Phishing and Spoofing

These scammers search the internet for real estate listings, diligently accumulating extensive personal information concerning both the real estate agent and the seller. Using the personal information of individuals who engaged in these transactions, they establish a legitimate email that resembles an authentic one.

Most prospective buyers unwittingly share personal and financial details because of these subtle alterations which go unnoticed.

It is advisable to gather the contact information of all participating in the transaction. Then use this information later as a reference to avoid falling victim to such scams

Database Hacking

When it comes to hacking activities, cybercriminals possess skills that acquire and discern up-to-date personal information such as real estate deals and those involved, such as buyers and sellers.

Their methods involved infiltrating the digital systems of real estate agents, title companies, and mortgage lenders which grants them access to monitor property closings.

With this acquired information, these hackers are able to impersonate real estate agents, title companies, or lenders, and they exploit this deception to take advantage of unsuspecting homebuyers.

Mortgage Fraud

Mortgage fraud happens in various ways, such as lending tactics, cyber-attacks, fraud schemes like reducing mortgage obligations, and other deceptive offers of assistance with their foreclosure.

Mortgage Fraud

Home Refinancing

Identity can also happen during the process of individuals who are lagging behind on their mortgage payments or are in a pre-foreclosure situation. Information provided can become a target for hackers who prey on homeowners facing financial difficulties.

For example, they can acquire your personal information such as name, address, birth date, and social security number through letters, emails, and even phone calls or text messages. Once information is acquired, they exploit it for their own purposes and sell to third parties for financial gains.

Forced Refinancing

This identity fraud acquires personal information and impersonates a legitimate lender by sending a seemingly authentic letter with all necessary details such as your mortgage loans, number, and amount.

The letter directs you to contact a specific phone number stating you claim your loan through refinancing. They will also request that you complete a form or initiate a money transfer as part of the process.

Predatory Lending

Be wary of lenders who refuse to disclose their lending fees, attempt to sell unnecessary products that are included in your mortgage payment (loan packing), or propose arranging automatic payments. In most cases, these payments will make withdrawals from your account which would result in overdraft fees.

Home Title Fraud

Home title fraud happens when ownership of your residence is illegally transferred from your name to that of the scammer, which replaces your name on the property deed. Once the deed is altered, it is subsequently employed by the scammer to deceive lenders which use your home as collateral or sell it without you knowing.

In recent years, it has been shown that home title fraud has become more prominent in scamming homeowners because of the accessibility of personal information online.

The prime targets of this theft are individuals who own vacation homes or investment properties that are not usually supervised or unoccupied property, and elderly homeowners. You should also know that these signatures are forges, therefore, legal ownership of your property cannot be legitimately transferred.

How to Prevent Homeowner Identity Theft

How to Prevent Homeowner Identity Theft

Create Strong Passcodes

2-step or two-factor authentication can provide an additional layer of cyber security against potential scammers who exploit passwords, so creating a strong password will be ideal.

Create a password not linked to your personal information like name or birthdate, anything usual or easily decoded. You may use uppercase or lowercase letters, numbers, and special characters while avoiding complete words.

Use a 2-Step Verification

Enable a two-factor or 2-step authentication process which will ensure that any individual that accesses your account is indeed you or the authorized user. Keep this option active to enhance security which adds a barrier to deter hackers from unauthorized access and potential data theft.

Monitor Your Credit Reports

It’s essential to review your credit card reports to verify their accuracy to your account information and awareness of any suspicious activity, such as unfamiliar accounts. You can register with NerdWallet for credit reports and scores, which will send you notifications about any credit card alterations.

Moreover, this enables homeowners to swiftly uncover unauthorized actions or transactions linked to their financial accounts and property dealings. Through consistent examination of credit reports, homeowners can spot unauthorized alterations in their mortgage or property records, including deceitful loan requests or property transfers.

This early identification empowers homeowners to take prompt measures such as reporting the fraud to the appropriate authorities and correcting the erroneous information.

Be Cautious with Unknown Email Addresses

Identity theft can also occur through phishing and spoofing acquired through enticing text messages, phone calls, emails, and malicious links. So carefully inspect email addresses, avoid downloading any unfamiliar links and attachments, and never disclose your personal information with unknown individuals or organizations.

Be Mindful of What You Share on Social Media

Be wary of what you post on social media platforms. You can unintentionally share personal information on your social media profiles for example, date of birth, the names of your family members, or even details about the schools you’ve attended. This creates an opportunity for scammers to make educated guesses about your passwords and usernames.

Safeguard Your Social Security Number

Your social security number is the primary access to your personal information. To prevent identity theft, be diligent to protect your personal details. When someone asks for your social security number, ask why and what security measures to protect it. As much as possible, avoid carrying your Social Security card with you, and make sure to securely store or shred any documents containing your Social Security number.

What You Can Do if You Are a Victim of Identity Theft

What You Can Do if You Are a Victim of Identity Theft

Call or Report Authorities

If you fall victim to the exploitation of your identity through a refinancing scheme, get in touch with your lender’s fraud department. The measures done are usually freezing your account to halt additional activity.

Change Your Personal Information Credentials

Constantly update your personal information this includes regularly changing passwords for online accounts related to your property, such as mortgage and home insurance portals.

Additionally, ensure your physical documents, such as property deeds and financial records, are stored securely, and consider using identity theft protection services to monitor any suspicious activity related to your home.

Visit Your Local Police Department

Report to your local police department about your home title theft and identity theft claim and bring your indication proof of address, and other relevant documents needed to sustain the incident.

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