As a real estate agent, you play a crucial role in guiding your clients through property transactions. If your client asks you what the difference is between Title Lock and Title Insurance this guide will help provide some clarity.
The Reality of Title Fraud
Title fraud involves scammers forging a homeowner’s signature to transfer property ownership, often targeting vacant or secondary homes. These fraudsters may sell the property or take loans against its equity, potentially leading to foreclosure. Alarmingly, homeowners might not realize they have been victimized until significant financial damage has occurred.
Understanding Title Lock
Title Lock is often promoted as a defense against title fraud. However, it’s important to note that Title Lock is not title insurance.
- Title insurance is a one-time purchase that safeguards against legitimate ownership claims before the purchase date, making it a wise investment for all buyers.
- In contrast, Title Lock is a monitoring service that alerts clients if their property title has been transferred. It doesn’t prevent fraud but notifies clients after a fraudulent transfer has occurred. Therefore, while it can provide alerts, it does not offer the comprehensive protection that title insurance does.
Protecting Your Clients
To safeguard your clients against title fraud, consider the following steps:
Educate Your Clients
- Inform clients that Title Lock is a post-fraud notification service, not a preventive measure.
- Emphasize the importance of title insurance for proactive protection.
Promote Vigilance
- Advise clients to treat personal information as valuable assets.
- Encourage the shredding of documents containing sensitive information.
Regular Monitoring
- Suggest clients regularly review credit reports and financial statements for unauthorized activities.
- Look out for unfamiliar charges, accounts, or withdrawals.
- Consider placing fraud alerts or freezes on credit reports.
Check Property Records
- Ensure their contact information is up-to-date with county records.
- Recommend clients periodically verify their property status with the local recorder’s office.
- Some counties offer a free service that alerts property owners whenever a document is recorded against their property: https://landtitleco.net/mason-county-offers-free-service-fraud-notify-to-property-owners/
Immediate Action Steps
- If identity theft is suspected, advise clients to file a complaint with the Federal Trade Commission (FTC).
- Report the crime to local law enforcement.
For more detailed information on title insurance and fraud prevention, feel free to reach out to our title department at 360-692-2233. Your clients’ security is paramount, and staying informed is the first step to safeguarding their investments.
Sources:
https://www.hometitlelock.com/
https://www.kiplinger.com/article/real-estate/t048-c050-s002-how-to-protect-your-home-from-deed-theft.html
