More states passing deed theft laws

Deed theft is rising and lawmakers are taking notice!

California, Virginia, and Alabama passed deed theft laws last quarter and another 10 states are moving forward with major legislation, data security firm EquityProtect reported.

However, 29 states still lack adequate safeguards and protections for the crimes.

“Six states have active deed theft bills pending. While meaningful, the legislation still doesn't completely cover homeowners,” said Ryan Marshall, CEO of EquityProtect.

"Most laws punish deed theft after it happens, they do not prevent it," he said in a press release. "Property owners need preventative safeguards, not just legal remedies after the damage is done."

Texas has the nation's strongest deed theft protections, according to EquityProtect. The state requires:

• Photo identification for title transactions

• Fast tracks court relief for incidents

• Enhances criminal penalties against seniors

While the nation's most populous states have some of the strongest protections, the most rural have the least such as Montana, New Mexico, and Wyoming. Second homes are a risk in many states with high tourism rates such as Vermont.

Twelve states have fraud alert programs or pre-2023 deed fraud statutes, while 15 more states are mulling protections, according to EquityProtect. Unfortunately, these provide notifications after-the-face and don’t actually protect fraud before it happens.

Beyond states, other stakeholders, and cities, have increased their efforts to combat title fraud. The American Land Title Association (ALTA) last August also created two new endorsements to address seller-impersonation fraud.New York City earlier this year opened an Office of Deed Theft Prevention, which followed the state's first criminal conviction for deed theft last year.

Title fraud victims can spend between $50,000 to $150,000 in legal fees to restore ownership following a fraudulent deed recording, EquityProtect said. The report cited the FBI's findings of $275 million in real estate cybercrime losses last year, although the FBI didn't specify how much of that was related to title fraud.

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