Have you seen the commercials for the Home Title Lock company's service or something similar? Do they provoke a sense of fear or concern about your home being taken away from you by a scammer and not even know it? I have to say that every time I see one of those commercials, I get a little queasy. I sure as heck don't want someone to be able to take my home and/or cost me tens of thousands, if not hundreds of thousands of dollars. So, I thought I'd take a deeper look at the whole idea.
First let me state that I'm not a real estate lawyer and I'm not giving legal advice here. That said, I'd like to explore with you whether it is necessary to have someone watch your title 24 hours a day seven days a week. Let me also state that my research is only for the state of Maryland; other states may have different risks.
The Maryland Attorney General (AG) has issued a Consumer alert concerning Home Title Lock. The alert says that Title Lock is neither Insurance nor a “Lock” on your home title. It simply is a monitoring service which may alert you to a change (after it happens) and may support you in restoring the title to you. It also says “Title fraud is very rare, and hardly ever successful”. If someone ever tries to transfer your deed without your permission or knowledge, like these title lock companies suggest could happen, “the transfer is fraudulent and void from the outset.”
The bottom line from the AG’s Consumer Alert is that you do not need the service. Today, all of us should be taking steps to protect ourselves from identity theft, after all, title theft is an extension of Identity theft. You can do most of the work yourself, something you should be doing anyway. In my judgement, one very important recommendation is to consider freezing your credit reports. This makes it difficult for a fraudster to open new accounts in your name. In addition, you should monitor your identity by paying attention to regular bills such as utility bills. If you don’t get one, investigate why. Carefully check your credit reports from Experian, TransUnion, and Equifax, which you can do for free, once a year from each of them. You can even check your title with Maryland’s land records website.
The AG’s alert does not mention any safeguards the county or state has in place to protect your title. However, reading between the lines in the Steps to Recording a Deed in Frederick County Maryland we can find some clues as to what they may be. Here are a couple that I see:
1. Lien Certificate/Tax Status Report – The property must be free of liens. If you have a mortgage on your home, you have a lien. That must be paid off before the property can be transferred. Of course, there could be others.
2. Water bill must be fully paid off.
3. All property taxes must be up to date.
4. Property tax credits must be recaptured, if any.
5. Agricultural Transfer Tax, if any, must be paid.
6. Recordation Tax must be paid (calculated at a rate of $7.00 per $500 of sale price).
The Maryland Land Instrument Intake Sheet is reviewed by at least 3 groups/agencies looking at the above information to be sure they are completed correctly (they have the receipts). There may be other safeguards involved but they are not highlighted anywhere.
If you are still uncomfortable and don’t mind spending the money (about $200 annually), by all means sign up for one of the title lock services. The AG’s Consumer alert says Title Theft is “rare” and you don’t need the service. Practice safe Identity procedures and relax.
I hope this post was useful to you. I have included some links below if you are interested in doing a little more research yourself.
Here are some helpful links.
Maryland Attorney General Consumer Alert – Home Title Lock
Protect yourself from identity theft.
