I am a homeowner with a lot of precious equity in my property. Here is why I am not buying title lock, even though I have experience with this type of situation.
I purchased title insurance when I bought my house. All lenders require it and all smart cash buyers also purchase title insurance. This protects your title from false liens, judgments, errors, omissions, false heirs, or a criminal who tries to file a false quit claim deed on your property.
That is my legal protection, and it is all I need.
The new “title lock” services are nothing more than monitoring services. They check public records (which you can also do for yourself), and then if they see that you were that extremely rare property owner in which a criminal filed a false quit claim, they alert you. But at that point, the filing is already done. (No, it doesn’t mean they now own your house!)
The title lock service is not clairvoyant to alert you ahead of time that a criminal is planning to file a false claim. Nor do they have any way of stopping it from happening. They can only tell you it happened.
What if it does happen? The title insurance you and I purchased when we bought our homes protects us. The title company is responsible to fix the error and pay whatever costs are involved in doing so. Just like fire insurance, the insurance company pays for damages — but with title insurance there is no deductible, so even better.
A couple of criminals posing as friends tried to steal my father’s house. He owned it free-and-clear. He had Alzheimer’s. They figured they could Quit Claim his property to a so-called charity, one they set up with themselves as the owners and trustees. One that no one ever heard of, because they just set it up for the purpose of stealing his half million dollar home. They filed the Quit Claim with the King County Court Recorder. Anyone can file anything; it doesn’t make it legal.
He had purchased title insurance decades ago with First American Title in Seattle. The title representative looked at the Quit Claim and said it was fraudulent. Which was obvious.
As my father’s legal guardian, I was able to stop that illegal nonsense. In this case, I also saw they stole other things from my father, so I hired a good attorney and we sued.
Back to the title lock services: As far as I can tell from Internet searches, it is unanimous among real estate attorneys and among real estate brokers who have been in business for 30+ years: title lock monitoring is a waste of money and does you no real good. You can always monitor your own public record if you’re nervous about being that rare (and usually it is the elderly who are targeted) victim.
If you’d like to read more about why it’s a waste of money, here is a good article with video by Fox5 Atlanta.
The penalty for filing a false Quit Claim or false lien ranges from one to 20 years in prison.
Thank you Carolyn for weighing in on this popular and confusing subject. The commercials are everywhere which usually mean there is much money to be made selling such an apparently useless gimmick.
Well said, Hunter.
Carolyn Thank you for the info on title insuranceGeorge
Title insurance insures your title (subject to exclusions and identified exceptions) as of the date you acquire. It does not insure your title for events or transactions after the date of the policy.
MJ, I am not sure I understand your statement. If a homeowner purchased title insurance and then a false lien appears, the title insurance they have in place protects them. I’ve observed that many times while doing refinances for mortgage clients.
Seeing an advert right now with newt Gingrich making the pitch. They are saying you can be dispossessed if your home. Is that not blatantly false advertising ?
I haven’t seen the advert, but it does sound like fear mongering and deceptive advertising. Good work on your part for recognizing that.
Hello, I just paid of my mortgage and own my home completely. Since there is no longer a lien on my home, how can I protect against someone fraudulently stealing my home. Those Title Lock Insurance commercials are very convincing and have some very reputable people endorsing their product. You article states that we don’t need it because we purchased title insurance when we bought the home. However, I no longer have any affiliation with the bank that had me lein since there is now no lein on my home. Please tell me what a person that owns their home outright should do for protection. Thank-you for all you do!
There are two different kinds of title insurance policies:
1) The lender’s policy is required in most home-buying scenarios when a mortgage loan is being used. This policy protects the lender’s financial investment/interest in the property, typically until the loan is either paid off or refinanced.
2) The owner’s policy is paid for by the buyer and is usually optional. In most cases, the cost of the owner’s title insurance policy is paid only once, though the coverage lasts as long as you own the home. While coverage and specifics can vary, this is usually how it works.
According to the American Land Title Association:
“An Owner’s Policy is typically issued in the amount of the real estate purchase price, and remains in effect for as long as the owner, or his or her heirs, retains an interest in the property. In addition to identifying risk before a transaction is completed, the Owner’s Policy will pay valid claims and all defense costs against attacks on the title.”
This means if you have to go to court to defend your right to your home, the title insurance policy helps defend your rights and covers the legal costs associated with the battle.
You can call the company that has your title insurance to confirm you have the Owner’s Policy and that you are protected as long as you own the home. If you don’t know who the title insurance is, then you can call any local title insurance company, and they can look it up for you. I don’t know what state you are in, but there might be variations from state-to-state.
I agree with your response to Christopher. Also, it would seem to me that with an attempted change in ownership, through a “fraudulent” Owner’s attempt to take over the property, that changes in County Property Taxes also comes into play for the “fraudulent” Owner, as a part or result of the “fraudulent” Owner’s Court filing. The moment anyone files in county court for new ownership in a piece of property, the applicable tax assessor is notified of the change in ownership, in order for the county tax assessor to assess and collect appropriate prorated property taxes from current owner and new “fraudulent” Owners. Another indicator that some fraudulent party is trying to steal your property.
Thank you for your contribution to the conversation, Don.
Hi Carolyn,
What are your thoughts on deed monitoring (or insurance) on land owned outright, purchased for cash in the 1980s. Someone fraudulently filed a deed on it last year (which the county rejected due to ‘grantor having no interest.’)
Worried though that a different attempt could get through. Does land purchased in cash so long ago have any sort of title/deed insurance?
You have a good question. My experience is in residential lending only, so I did not have any transactions with raw land. I would suggest that you call a company like First American Title or Old Republic Title or whoever you have local to you and ask. An experienced title officer should be able to answer your question. You might need to make several phone calls before you find a true title expert. Another good source would be a real estate attorney. You can get free legal advice for one question on sites like AskaLawyer.