This article originally appeared in the November 2020 edition of the Merrimack Valley Housing Review.
Protecting Your Home Title from Theft
By Richard P. Howe
Jr.
A
number of homeowners have recently called the Registry of Deeds to ask if the
title to their home is safe from online theft. Because my own social media
stream has been filled with ads from a company called Title Lock, I understand
why they are calling. The ads usually begin with something like this: “Alarming
FBI report shows hackers can steal the title to your home in minutes – without
you ever knowing it.” For $14.99 per month, Title Lock will provide its “basic
protection service” which monitors your title and notifies you if anything is
amiss.
So
is this a legitimate concern? Well like most things related to real estate law,
it's complicated. First, your “title” is not a thing. Instead, it is a legal
opinion based on a review of all the records at the registry of deeds about who
owns or has a legal interest in a particular parcel of real estate.
That
said, here is the scenario contemplated by Title Lock and its competitors, at
least as I understand it: A wrong-doer creates a deed that purports to transfer
ownership of your property from you to him, forges your name on the deed then
forges a notary public's signature and stamp on the deed; and then records this
forged deed at the registry of deeds. Next, the wrong-doer applies for a
mortgage that uses your property that now appears to be in the name of the wrong-doer
as security for the loan. The lender consults the registry records, sees that
the applicant owns the property, grants the loan, and records a mortgage in the
name of the applicant (not you) that encumbers the property. The
wrong-doer/applicant never makes a payment and the lender eventually begins
foreclosure proceedings against the property. The wrong-doer likely listed his
mailing address as something other than the property address so you, still
living in the house and unaware of all this, would not get any notices of the
foreclosure until one day when an auctioneer showed up on your front steps to
sell your house at auction.
Sounds
pretty scary – rightfully so - but under Massachusetts law, a forged signature
does not convey ownership so the forged deed would be void as would the new
mortgage that is being foreclosed. The real risk is not that you will lose your
property, it is that you will be saddled with the hassle and cost of proving to
everyone that you did not execute the forged deed. Because of all the layers of
forgery involved (your signature, a notary's signature) it would not be very
difficult to prove that, however, the burden would be on you to initiate the
lawsuit needed to determine that.
Whenever
a document is recorded at the registry of deeds, we immediately add the names
of anyone listed on the document and the address of the property involved to
our computerized index. Much like the index at the back of a textbook, the
registry index is the key to finding relevant documents in the registry of
deeds records.
What
this Home Title Lock service purports to do is to continuously scan the
registry of deeds index and anytime your name appears on a newly-recorded
document to then notify you of this fact. Because the registry of deeds index
is online and freely available to anyone, a homeowner concerned about this
could periodically enter his or her name in the registry website and perform an
identical check. That would take about 30 seconds but it would require you to
go to the website on a recurring basis.
Also,
several registries of deeds in Massachusetts already offer a similar service
for free, however, most registries (including this one) are not yet able to
offer it. When the pandemic struck we were in the process of selecting and
installing an entirely new computer system with many advanced features
including this automatic monitoring capability but its deployment has been
delayed because of the pandemic.
In
any case, whether you paid for Title Lock, had a registry-provided automated
alert, searched the registry records yourself, or just waited for the
auctioneer to show up, you would be in the exact same position: having to
initiate a lawsuit to expunge the fraudulent deed and proving that the deed was
forged. As I said, it should not be too difficult to prove the forgery but you
would still bear the cost of hiring a lawyer to handle the matter. Title Lock does
offer an enhanced “resolution service” to help with this but I am not sure of
the cost and coverage. Also, some title insurance policies would cover this,
but some do not – you have to read the fine print. (Most people obtain title
insurance when they buy or refinance the home but since it is hardly ever used,
few people are familiar with it).
All
this begs the question what does the registry of deeds do to prevent the
recording of forged deeds? The answer is not very much but that is a public
policy decision made at echelons of government high above the registry.
Specifically, our land records system relies on documents being rapidly
recorded. If the registry were to have to investigate every signature on every
deed to determine whether it was a forgery, the recording process would grind
to a halt and the multibillion dollar real estate economy would be severely
disrupted.
While
the incidence of this type of fraud may be on the rise, it is still very rare.
In my 25 years as register of deeds, I've never encountered a case where this has
happened. There have been a couple of forged deeds, but they involved family
members or friends of aged and incapacitated homeowners, not an anonymous
interloper on the internet.
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