Graceland, the famous Tennessee home of the late Elvis Presley (now a museum and tourist attraction), has been in the news recently for its involvement in a foreclosure dispute.¹ Riley Keough, the oldest grandchild of Elvis, is in court contesting an attempted sale of the property, claiming the company trying to sell the estate as collateral falsified the loan and deed documents. While the case works through the court system, the controversy has sparked a new wave of interest in title fraud among the public. Banks and their customers may be particularly worried about title fraud, considering the potential losses associated with this kind of fraud. Financial institutions risk financial loss due to mortgages and loans secured by fraudulently owned property. Financial institution customers who are victims of title fraud risk financial loss of the equity they have worked hard to build in their property and risk difficulty in securing future lending due to a negatively impacted credit rating.

What is Title Fraud?

Title fraud occurs when a “thief” steals a person’s identity and/or forges documents to seem as if they are the rightful owner of a property. Once they do so, they can wreak havoc by taking out liens or mortgages on the “stolen” property, burdening the true owner with the financial obligations. These thieves also may attempt to sell or rent out the property to an unsuspecting third party, leaving the true owner in a confusing and expensive legal battle.

While these fake deeds and mortgages do not legitimately transfer ownership of the property or create financial obligations the victim is liable for, the process of undoing this harm by proving true ownership can require a devastating amount of time and money. Despite these adverse consequences, banks and their customers should understand the factors influencing the probability of falling victim to title fraud in order to evaluate their individual risk exposure.

Evaluating the Risk of Title Fraud

The good news is title fraud is not as common as other types of identity theft crimes.² While some people claim the number of victims of title fraud has risen in step with the recent increase in online closings and notarizations,³ it is unclear whether this characterization is accurate. The FBI’s Internet Crime Report documents the number of victims in the U.S. who have suffered from real estate crime — meaning they have experienced “loss of funds from a real estate investment or fraud involving rental or timeshare property:”⁴

• 2020: 13,638 victims.
• 2021: 11,578 victims.
• 2022: 11,727 victims.
• 2023: 9,521 victims.

These figures suggest the frequency of title fraud may not be on a dramatic rise, contrary to popular perception. Regardless, the following risk factors may help someone determine whether a piece of property is more vulnerable to title fraud:

• Property with out-of-state owners.
• Property with owners who have more than one home.
• Property or real estate left vacant or unoccupied.
• Investment property.
• Vacation homes.
• Property with high equity (no mortgages or liens).
• Inherited property, where the original owners are deceased.
• Property with aging owners or owners who are inattentive with personal information and technology.

Each of these risk factors provides criminals with a greater opportunity to “steal” the title without the true owner knowing. It is easier for title thieves to target individuals who make it easy to steal their identity or individuals who are not (or seem as if they are not) paying attention to their property. Particularly relevant to banks and their customers, property with high equity is more at risk than property encumbered by mortgages or other liens. This is because title thieves know financial institutions with an interest in a piece of property as collateral could be monitoring these properties in various ways. Even a little extra monitoring increases the likelihood a title fraud thief gets caught, making those properties worse targets.

What Can Be Done to Discover and Prevent Title Fraud?

Individuals worried they are victims of title fraud or will be victims in the future can do several things to identify the fraud themselves or try to prevent it from happening:

• Look for Signs of Title Fraud:⁵
  • Receiving bills for accounts not opened by the individual.
  • Getting calls from debt collectors for debts the individual does not owe.
  • Finding unfamiliar items on a credit report, such as mortgages or lenders not recognized by the individual.
  • Receiving notice from the IRS that the individual has unpaid taxes.
  • Discovering a piece of property has been rented out or sold.
• Check Title/Property Records
  • Each county has a different system for checking title and property records that anyone can search. Additionally, some counties have “property fraud alert” systems where individuals can sign up online to receive alerts any time their name is mentioned in new documents in the property recording system. This can help property owners quickly catch someone who is attempting to impersonate them.
  • Nebraska:
    • The following counties have free property fraud alerts: Buffalo and Scotts Bluff.
    • Some counties’ property records can be searched for free at nebraskadeedsonline.us.
    • Douglas County can be searched for a fee of $25 per day at www.dcregisterofdeeds.org/premium-services.
• Check Credit Reports
  • A credit report search may reveal any mortgages or loans connected to an individual or their property they did not take out.
• Protect Personal Information
  • Protecting personal information by securing Wi-Fi networks and staying up to date on common information security risks (for example, phishing emails or scammers posing as lenders or real estate agents to get personal information) can help ensure title fraudsters cannot steal the information they need to forge deed or loan documents.
• Check on Unoccupied or Vacant Property
  • More vigilance on property left unoccupied could deter criminals from targeting an individual’s property in favor of a property where they are less likely to be caught.
• Set up a Google Alert
  • Individuals can set up Google alerts for their property’s address, and Google will notify them anytime their address is mentioned on the internet. This could help an individual catch someone trying to put their property up for sale or for rent.

Considering Title Monitoring Services or Title Insurance?

Bank customers might have recently seen commercials touting the ease at which criminals can forge documents to steal their homes and offering monitoring services or title insurance. For clients wondering whether investing in such protections is worth the cost, the following provides a brief overview of each:

Title Monitoring Services
Title Monitoring Services help alert their customers if there are signs they are experiencing title fraud. Depending on the service, this may include monitoring credit reports, monitoring property records for mentions of the client, setting up internet alerts on the client’s address to see if their property becomes listed for sale or rent, and other digital security protections. It also may include some sort of insurance should the client experience losses due to title fraud, but such protection is not common.

As discussed previously, because individuals have the ability to check their title or property records, get credit reports and set up Google alerts, individuals can do a lot of what the title monitoring services offer on their own, and potentially with a much lower cost.

Title Insurance
Title Insurance is a policy that protects property owners from losses associated with defects in the title of their property. Most commonly, this is purchased by new property owners during real estate transactions as part of the closing process. At the time of purchase, the title insurance company will do a deep dive into the state of the property’s title for anything in the past that may cause trouble. Because the title company usually does not continue to run searches or monitoring services after the property has been sold or transferred, most policies will only cover title defects that arose before the purchase of the insurance. There are some title insurance companies that offer policies covering losses that may occur in the future,⁶ but this is not the norm.

If individuals are considering or currently buying a home or other property, it is always recommend they purchase title insurance as part of the real estate transaction. If an individual has already purchased title insurance for their current property, however, purchasing title insurance again will likely not protect them from anything that happens in the future unless they purchase a policy specifically covering future title fraud losses.

Overview

While title fraud can be a devastating experience for property owners, the risk of it happening is lower than some individuals may think. Despite this, the legal turmoil surrounding Graceland serves as a reminder to have a Suspicious Mind and be aware of factors that make individuals more likely to be targeted, as well as the steps people can take to mitigate the risk of being a victim that Can’t Help Falling for title fraud.

Emily S. Tosoni focuses her practice on tax and estate planning as well as estate and trust administration. Emily graduated from the University of Iowa College of Law in 2021, magna cum laude. While in law school, Emily became a member of the Order of the Coif, a distinction awarded to the top 10% of the Class of 2021. Emily received the Judge William Stuart Award for her graduating class, as well as the Dean’s Award for Academic Excellence for Property and Trusts & Estates and the Jurisprudence Award for Academic Excellence in Contract Drafting.