It does not protect you in any way from a scammer fraudulently transferring your title. So, if you buy Title Lock insurance, you may think that would protect you against that scam, but Adams says it doesn't.įirst, it’s important to know that Title Lock is not insurance of any kind. In an ironic twist, the lender probably required the scam borrower to pay for lender's title insurance to protect the lender against fraud just like this. The title insurance company would probably have to eat the loss, then try to recover against the scam borrower. The technical term for what happened is forgery in the first degree and shall be punished by imprisonment for not less than 1 nor more than 10 years.Īnd since the scammer never legally owned your house, the lender has no legal claim on your property. If they tried to foreclose, that would be considered "wrongful foreclosure." The new scam owner obtained their claim to ownership by a fraudulent deed. They would have to prove that your signature on that deed is valid and that you signed it. And the fact is that you didn’t.
It can happen, but it's a very rare scam right now. Under title fraud, a scammer forges your name on a deed, then files it in the records room of your county courthouse, then takes out a loan, using the home as collateral. Title Lock claims to protect you against title fraud, which by definition is not a legitimate claim.
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