You have no doubt seen recent ads about “house stealing.”
This is a real thing, although I think “title theft” is the better term. They don’t actually steal your house; it is still sitting there, firmly attached to the ground. But potentially it could indeed cause you to lose your house.
Here’s how it works. You can prove you have title to your house because there is a series of deeds in the public record, showing who owned the underlying property, and who they sold it to, and that sequence of deeds ends with you. Each of those deeds was signed in front of a notary public, who had to confirm the identity of the person signing. Whoever it was that owned your house before you, signed a deed under oath, which was recorded with the State, saying they sold it to you.
So what a title thief does, is forge a deed. They put together a document that looks real, saying that you are transferring the property to them. Of course they can’t sign it in front of a real notary, because the notary would want to see their ID, and they can’t produce an ID showing they’re you. However, they can get a rubber stamp kit and put together a fake notary stamp and forge the notary’s signature as well as yours.
And then they record it. There is now a document in the public record showing that they own the property. It’s fake, but it looks real.
But that is only the first step. They don’t want your house; the minute they show up at the door, you are going to realize somebody has committed a fraud and call in the authorities. The thief doesn’t want to be there when you get wise to the scam. The title thief could sell the house, but that may be difficult because most buyers are going to want to inspect the house, and again if somebody shows up at the door you are going to be alerted that somebody is trying to scam you.
But do you know who doesn’t always inspect the house? Mortgage lenders. So, the title thief contacts a mortgage lender and applies for a home equity line of credit or some other type of mortgage. If you have a lot of equity in your home, potentially that mortgage could be for a pretty substantial amount of money, maybe hundreds of thousands of dollars. The thief can tell, from the property records, which houses are owned free and clear.
And a few months later, since nobody is actually going to make payments against that mortgage, you suddenly receive a foreclosure notice. Now you are definitely aware something is going on. But by that time, the thief has taken that mortgage money, converted it to cash or bitcoin, and skipped town, leaving you holding the bag.
The good news is that you will most likely be able to hold on to your house. A handwriting expert can establish that you did not actually sign the deed, and that can stop the foreclosure. The bad news is that you are going to spend a lot of money on that handwriting expert, not to mention the attorney you will need to defend you in the case. This is a private lawsuit, and your opposing party isn’t the title thief, it is the mortgage lender who is trying to foreclose on the home. Lawsuits like this aren’t cheap.
What can you do to protect yourself against title theft? Well, there are those companies you see advertised. A service like that will probably cost around $20 a month but understand that they don’t actually prevent someone from transferring your title. All they do is monitor any activity on your title and then alert you if something happens. By the time they find out and tell you, the title thief has already transferred the property. On the other hand, they may or may not have been able to arrange that false mortgage yet. And some of those services will also pay for the attorney fees to defend you.
You can also freeze your credit by contacting the credit reporting agencies. That way nobody can, for instance, take out a credit card in your name. That does not necessarily protect you from title theft, though, because the title thief isn’t taking out that mortgage in your name. They are transferring it to themselves and then taking out the mortgage in their own name.
One partial solution is to put your property into a trust or LLC. That doesn’t prevent the theft, but it does present an extra hurdle for the thief. The mortgage company will want to see a copy of the trust or LLC documents, which means they have to forge a few more items and make them look real. It helps because you are no longer the low-hanging fruit, so the thief is more likely to go after someone else instead of you.
But the best thing you can do—and for this you should be very glad you live in Alaska—is check your own title regularly. The Alaska Recorders Office has a website where you can look up any deed you like, for free. It is located at https://dnr.alaska.gov/ssd/recoff/search. You can’t look it up by your street address, but you can look it up by your name, or if you have the previous deed, by the legal description. And if you see a recent entry that you don’t recognize, you can click on it and, potentially, see that fraudulent deed.
When those people in the ads tell you what a nightmare it was when somebody stole their title, they aren’t exaggerating. But the sooner you find out somebody is trying to snatch your title and take out a phony mortgage, the easier it will be to head that off at the pass.
Kenneth Kirk is an Anchorage estate planning attorney. Nothing in this article should be taken as legal advice for a specific situation; for specific advice you should consult a professional who can take all the facts into account. Sorry about the lack of humor in this one; it was written by AI. No, just kidding, I don’t use AI. That was the joke.
