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Title Lock: What Is It and Do You Need It?

By:  Heidi R. Kemp
Emens Wolper Jacobs & Jasin Law Firm

I recently had a client ask me if they needed title lock and I had to admit to them that I had no idea what title lock was.  After the meeting, I started looking into what title lock meant and whether it was something that could be beneficial for people to have.  What I found was something that appeared to be one thing and really ended up being something else – something that I feel should be approached with caution.

If you google title lock, you will get websites for companies who sell title lock and claim that their service monitors your home’s title and alerts you if there have been any unauthorized changes to your title.  Some of these products have even been “proudly recommended” by people such as Sean Hannity, Newt Gingrich, and Glenn Beck.

The pitch for this product implies that it will protect your home from fraudulent transfers.  A fraudulent transfer would be someone forging your name to a deed transferring the property from you and to them.  The title lock companies further explain that the forger could then go get a loan on your property, pocket the cash and skip town.

The main thing you need to know is that title lock is a monitoring and alert system.  It is not designed to prevent fraudulent transfers.  They randomly review the county court records to determine if a transfer has been made for your property and then alert you if one has occurred.  Some companies appear to also provide some level of assistance if a fraudulent transfer has occurred but to what extent is unknown.  They provide these services for a monthly fee.

Here are some things to consider:

  1. Fraudulent transfers of real estate are extremely rare.
  2. You, or anyone, can check the county records at any time and determine whether a transfer has been made.
  3. It is true, as claimed by these companies, that the County Recorder does not verify the truth of the deed or its signer. However, a deed in Ohio must be notarized.  Thus, a notary is required to obtain proof of the person’s identity prior to notarizing the deed.  A forger would not only need to forge your name but they would need to dupe the notary public as well.
  4. If the forger took a loan out using your property as collateral, you would not be required to pay it back and the lender would not be able to foreclose on your property if payments were not made. If the lender required the forger to have title insurance before closing on the loan, it is possible the title insurance company would have to pay the loan back and then try to recover against the forger.  But in any event, the forger never had legal title to your property so a lender cannot foreclose on it in the event of default of the forged loan.

If a fraudulent transfer were to happen to you, it certainly would create a certain amount of hassle – I imagine much like having your identity stolen.  However, you would not legally lose title to your property and you would not have to pay back any loans the forger took out on the property.   The risk seems very small compared to the monthly price of paying for a monitoring service.  As always, be sure to research and investigate these types of things to ensure that you know what you are paying for.