banner2 Home Equity Theft Through Identity Theft

 

 


A home equity loan could lead to home theft!

Thieves steal your identity and then take out a home equity loan and keep the cash

The demise of the stock market in 2000 has led to a boom in real estate investing. People who formerly were putting their money into stocks are now investing in property, and prices have shot up nationwide. The result of this huge influx of investor money in real estate has left millions of homeowners with record amounts of equity

in their homes; many have homes that are worth hundreds of thousands of dollars more than they paid for them. The boom of the last five years has been good to both homeowners and lenders. Unfortunately, it has also been good to thieves, who are continually inventing more and more clever schemes to rob homeowners of both their homes and their equity.

The median price of a home in the US recently reached a record value of $209,000. With homes with that much now, there is plenty of incentive for would-be equity thieves. The equity scam is a fairly simple one that targets homes that are fully paid off. The thief obtains a copy of the Social Security number of the homeowner by whatever means is available, and uses that number to acquire a fake driver’s license in the name of the homeowner. Using this fake identification, the thief, acting as the homeowner, declares that he or she no longer has any interest in the property. This is done by forging what is known as a “quitclaim deed”, a document that says, in essence, “I don’t want this property anymore, and this person can have it.” 

The document names a third party, who is an accomplice of the thief. Once the home has been signed over to the accomplice, the thieves may apply for a home equity loan in the name of the accomplice. Once this is approved, they simply take the money and disappear. A variation on this scheme involves selling the house outright and keeping the money. Most lenders and title companies are quite busy these days, and transactions of this type can frequently take place without drawing too much attention.

This is just one of many scams that have recently been in the news involving high-value real estate. The authorities are certainly making an effort to catch these thieves, but their efforts are complicated by the labyrinthine paperwork involved and the fact that few law enforcement officials have any experience with this type of crime. In most cases, the only recourse the legal homeowner has in this situation is to sue the mortgage company that processed the transaction. The best thing a homeowner can do to avoid being a victim in such a case is to take steps to avoid identity theft and to avoid giving out his or her Social Security number unless it is absolutely necessary.

Failure to protect your identity could cost you your home and more, as identity thieves tend to continue accumulating debt in a stolen identity for as long as it continues to work.
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