Podcaster and Faith Driven Investor President Rob West says while identity theft-based deed fraud does happen, "it's usually a paperwork mess, not a financial catastrophe."
"Essentially, two very different crimes use the same document (involving) the quitclaim deed," West recently explained on his radio program. "It's what allows you to sign over your home."
He said only one of these crimes "can cost you your home," and it is important to understand the difference between the two.
Deed forgery identity theft is often featured in the alarmist ads as "home title theft." The criminal forges a quitclaim deed or pretends to be the homeowner to file it with the county recorder and then takes out a loan and tries to sell the property.
"Here's what matters: the real owner still legally owns the home," West pointed out. "A forged deed doesn't hold up in court. The thief might get the loan proceeds, but the lenders or title insurers take the financial hit, not the homeowners. The result is a bunch of stress and paperwork, but not the loss of your house."
He said most homeowners can protect themselves by signing up for their county's deed alerts to receive free notifications if someone files a document in their name – and by never signing away their title without trusted advice.
The other crime is a quitclaim con that West describes as a "persuasion scam" in which the scammer talks a homeowner into willingly signing a legitimate quitclaim deed and transfer ownership to them, only they do not realize it is happening in the first place.
He says this version is more dangerous of the two, but it is also far less common.
"Bottom line: never sign a deed or power of attorney or any transfer document without legal advice," West said.
