Why would someone want to steal your property title?
The answer is simple: financial gain.
Someone with a stolen title might attempt to take a loan out against your property or even sell the home and collect the cash. Or the thief might pose as a landlord, attempting to get unsuspecting renters to cough up rent and a month of security deposit.
Title theft or fraud can threaten an owner’s actual ownership of property and their financial wellbeing. It happens when a scammer obtains an individual’s personal information and commits identity theft, using it to fraudulently create a deed and record it against the victim’s property.
How hard do you think it is for someone to remove and replace your name from your own property title by submitting a fraudulent document to the county recorder’s office? After all, there’s no such thing as a property title lock or freeze similar to how we lock up our credit reports.
If the document meets all the technical requirements, is properly notarized, legible and has all the necessary information, it can be recorded.
Let’s say you find out some fraudster stole your property title before any real damage was done. It’s not as simple as filing a police report or complaining to the recorder’s office. Getting it unwound is going to cost you a lot in terms of effort and money spent in attorney fees.
If a scammer has a deed recorded against your property, you must take legal action, according to real estate attorney Mike Hensley.
A property owner will have to file a lawsuit in order to cancel the fraudulent deed, said Hensley.
“You might also need to ask for a temporary restraining order (TRO) which is a short-term, emergency form of injunctive relief,” he told me. “It’s issued by a court to stop a party from acting, to prevent imminent, irreparable harm.”
Your attorney would also file a “lis pendens,” which is a recorded notice in the chain of title alerting potential buyers, lenders and the public to ongoing litigation concerning the property. It puts a cloud on the title, Hensley said.
A new California law, Senate Bill 255, was created to alert property owners to any deed fraud.
By Jan. 1, 2027, every California county (except Los Angeles County as it designed its own program) is required to establish a county recorder notification program. The program will notify by mail the party or parties executing a deed, quitclaim deed, mortgage or deed of trust within 30 days of recordation.
SB 255 also allows any county recorder to establish an electronic notification program to complete the required notifications.
Several counties already have programs offering courtesy notifications of changes in real estate documents. Orange County is one of them.
Here’s how SB 255’s author, California State Sen. Kelly Seyarto, describes how the bill works:
When someone owns property, they have title to that property. To evidence ownership, a document called a deed is created. Deeds can be evidence of the transfer of that title to property between two parties, such as through a quitclaim deed or warranty deed.
A quit claim deed is a legal document used to transfer ownership from one party (grantor) to another party (grantee).
A warranty deed is a legal document used in real estate transactions that transfers ownership from a seller to a buyer, guaranteeing the title is clear, valid and free of undisclosed liens, encumbrances or third-party claims.
Another type of deed, the deed of trust, is used to secure a loan by conveying title to property from the borrower to a third party as security for the loan from the lender.
Deeds must contain sufficient information to describe the parties and property involved; describe the type of transfer or transaction regarding the property it is making.
Recording a deed helps to determine ownership if there is a future dispute.
Other alert options
Besides SB 255 are there any other options available to protect real estate assets?
On Jan. 26, First American Title launched a free property title monitoring and fraud alert service for its customers in California and 24 other states.
Title monitoring notifies homeowners of new filings (via email) of deeds or liens that may affect property ownership, helping owners detect potentially suspicious activity early so they can act.
Unlike standalone title monitoring products, FA Title’s monitoring service is paired with the protection of a title insurance policy from the underwriter. Customers who register for the service also get digital access to their title policy documents and a connection to claim support should a title or ownership issue arise, according to company press release.
The service is expected to be offered to existing FA title insurance policy holders later this year.
Freddie Mac rate news
The 30-year fixed rate averaged 6.1%, 1 basis point higher than last week. The 15-year fixed rate averaged 5.49%, 5 basis points higher than last week.
The Mortgage Bankers Association reported a 8.5% mortgage application decrease compared with one week ago.
Bottom line: Assuming a borrower gets an average 30-year fixed rate on a conforming $832,750 loan, last year’s payment was $466 more than this week’s payment of $5,046.
What I see: Locally, well-qualified borrowers can get the following fixed-rate mortgages with one point: A 30-year FHA at 5.375%, a 15-year conventional at 5.125%, a 30-year conventional at 5.625%, a 15-year conventional high balance at 5.5% ($832,751 to $1,249,125 in LA and OC and $832,751 to $1,104,000 in San Diego), a 30-year high balance conventional at 5.99% and a jumbo 30-year fixed at 5.99%.
Eye-catcher loan program of the week: A 30-year mortgage, fixed for the first five years at 5.25% with 30% down payment and 1 point cost.
Jeff Lazerson, president of Mortgage Grader, can be reached at 949-322-8640 or [email protected].
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