Quick Answer
Home equity theft is a form of property fraud where criminals exploit a homeowner’s equity or ownership documents without authorization. This can include obtaining loans, liens, or selling a property through forged paperwork, often resulting in financial loss and legal complications for the rightful owner. Early detection through regular monitoring and protective services helps reduce risk.
Table of Contents
Home equity theft is a form of property fraud that targets the value homeowners have built in their property by using forged or manipulated ownership documents or financial information without consent. While specific nationwide statistics for home equity theft are not separately tracked, federal data on real estate fraud highlights the broader risk. The FBI’s Internet Crime Complaint Center recorded more than 9,500 real estate fraud complaints in 2023 with over $145 million in reported losses, illustrating the significant financial impact these crimes can have on victims.
Fraudsters often exploit public records, identity theft, and weaknesses in verification procedures to access a homeowner’s equity or manipulate title records. Once they obtain control, they may use the property as collateral for loans, take out equity lines of credit, or encumber the home with liens — sometimes without the homeowner’s immediate knowledge. Because these schemes can unfold quietly and quickly, industry experts and law enforcement emphasize the importance of vigilance, including periodically reviewing property records and financial accounts for unexpected changes.
Home Equity: What Is It
Equity describes the value of an asset after subtracting the value of any liabilities on the asset. Commonly used to describe the value of a home and help purchase a new one, equity will be considered in taking out loans or paying off large bills.
Home Equity Theft
According to LegalMatch.com, “Real estate fraud occurs when one party intentionally uses false information or makes a false representation relating to real estate. In general, home equity fraud occurs when someone tries to steal the equity a homeowner has built up in their home.”
How To Prevent Home Equity Theft
One of the most common criminal scenarios involving equity theft occurs when a thief poses as a homeowner and proceeds to take out a fraudulent home equity line of credit (HELOC) and then runs with the cash. How can this even happen? A crafty thief can simply obtain your personal information from public records, forge your homeowner’s signature, and reroute the loan so the line of credit is sent to them and not you as the real homeowner. Chances are you won’t know you’re a victim until it’s too late!
The second most common equity theft scenario occurs when a homeowner falls behind on their mortgage payments. This type of fraud is unfortunately committed by seemingly legitimate financial agencies and lenders, who may require the homeowner to put up ‘fishy’ amounts of cash against their home, falsify information or actually take out your home equity to pay off debt or other concocted situations so you basically hand over your hard-earned home equity dollars.
The Most Vulnerable Targets of Home Equity Theft
Powered by the DomiDocs Homeowner Enablement Platform®, HomeLock™ has identified and ranked the most vulnerable victims of equity fraud as being high equity, no mortgage homeowners, and beloved senior homeowners, which could be you or a cherished family member. And no one wants any vulnerable senior to be taken advantage of.
The Best Way to Protect Yourself from Equity Theft is By Being Proactive
Regularly monitoring your credit reports is a great way to start protecting yourself from any type of property fraud. But seriously, in today’s busy world, who has time for that? HomeLock™ is here to provide scanning and monitoring of 200+ data points 24/7/365. Immediate detection is the best defense only HomeLock™ has an early warning system that alerts you before, during, and immediately after fraud or errors occur. HomeLock™ has a 5/5 rating with both Google and the Better Business Bureau, plus we’ll provide you with a free 7-year title scan history report when you sign up for HomeLock™ today.
HomeLock™ Also Provides Fraud Resolution Services
Generally, if you’re a victim of equity theft or another form of property fraud, you’re out there on your own wondering what to do next. Our dedicated HomeLock™ Fraud Protection team will assist you with up to 2 hours of data correction services per membership including research on alerts found. Membership also includes $25,000 in legal services for fraud defense and a $1 million Cyber Insurance Policy.
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- Homeowner Enablement Platform® – A centralized, digital hub for organizing documents, tracking home value, and managing property details effortlessly.
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FAQ
What Is Home Equity Theft
Home equity theft is a type of property fraud where someone illegally leverages or drains the value you have built in your home through forged documents, unauthorized loans, or fraudulent property transfers.
How Does Home Equity Theft Happen
It typically starts with identity theft or falsified ownership records. Criminals may forge deeds, take out loans using your equity, or record liens without your permission.
Who Is Most At Risk For Home Equity Theft
Homes with significant equity, paid-off properties, vacant properties, and homes owned by elderly or otherwise unaware owners are often targeted because they appear more vulnerable.
What Are Common Signs Of Home Equity Theft
Unexpected loan or lien notices, unfamiliar accounts on your credit report, foreclosure or tax notices you didn’t authorize, or changes in public property records can all be red flags.
Can Home Equity Theft Be Reversed
Yes, but restoring your rights and correcting public records often involves legal action, documentation, and time. Early detection can significantly improve the recovery process.
How Can Homeowners Protect Themselves From Home Equity Theft
Homeowners can protect themselves by regularly checking public property records, monitoring credit reports, reviewing financial statements for unfamiliar activity, and using protective services that alert them to suspicious changes.