Title Insurance Fraud

What Is Title Insurance Fraud

Title insurance fraud is a type of fraud that involves the deliberate misrepresentation of information on a title insurance application in order to obtain a policy or collect a claim. Title fraud is a type of insurance that protects homeowners and lenders against financial loss due to defects in a property’s title, such as unknown liens, encumbrances, or ownership disputes. Additionally, it will cause headaches down the line.

Title Fraud Schemes

This type of fraud can involve a variety of schemes, including:

1.         False representation of ownership: This occurs when someone who is not the rightful owner of a property seeks to obtain a title insurance policy by misrepresenting themselves as the owner.

2.         Fraudulent liens: This occurs when someone creates or fabricates a lien on a property in order to file a false claim against a title insurance policy. This will effect and is considered business fraud.

3.         Forged documents: This occurs when someone forges or alters documents related to a property’s title, such as deeds, mortgages, or liens, in order to obtain a title insurance policy or collect on a claim.

4.         Illegal property flipping: This occurs when a property is bought and sold multiple times in a short period of time at inflated prices in order to fraudulently obtain a title insurance policy.

Results of Fraud

Title fraud can result in significant financial losses for title insurance companies and individuals. This is because it is illegal and can result in criminal prosecution and civil liability. It’s not just the corporations that loose money, it’s the homeowners who pay the price as well.

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