The year 2016 saw an astounding one out of every 16 adults fall prey to identity theft. The rise in technology has made obtaining personally identifiable information, such as name, date of birth, or social security number, much easier for fraudsters to access. One of the rarer yet more devastating forms of identity theft occurs through mortgage fraud.
Take the case of John Sileo: though he is now a leading privacy expert and founder of ThinkLikeASpy.com, a Denver-based identity theft prevention company, he has been the victim of identity theft twice, and believes his fraudsters went dumpster diving and found his personal information, either through pre-approved credit card offers or a letter from his mortgage company (which contains loan numbers and addresses). In the most recent occurrence, his identity was stolen by a woman and used to purchase a $300,000 house.
“It was stunning that she could use my name and Social Security number for such a large purchase,” he stated. The woman’s actions represent one way to commit mortgage fraud — to actually obtain a home — though many fraudsters who commit this crime are more interested in the money than the asset.
One man in Nevada was shocked when the County Sheriff showed up at his door with an eviction notice, stating that he and his family, along with all of their possessions, were facing eviction because they had failed to make mortgage payments on a paid-off home. In this man’s case, his fraudsters found his personal information and obtained mortgage financing in their own name; once they received the money, they defaulted on the loan, causing him and his family to face eviction.
The nature of these crimes makes it increasingly difficult to catch the perpetrator: in nearly every case of mortgage fraud, the victims are entirely unaware that they’re victims. Collection and eviction notices go to other addresses, making it impossible for homeowners to know that leins are being placed on their houses. By the time the sheriffs arrive, the thieves are long gone.
The number of new mortgages has increased significantly, up from $1.4 trillion in 2008 to just over $2 trillion in 2016. Though this means more people are at risk, there are ways to combat the chances of you becoming a victim yourself. Aside from vigilance, which includes the shredding or destruction of all credit card offers and mail that may contain sensitive information, one of the easiest ways to protect yourself is to freeze your credit.
On September 21 of this year, laws passed in May went into effect requiring each of the three major credit bureaus to freeze consumers’ credit free of charge. Credit freezes block outside parties from viewing your credit score, making it impossible to open a new account with your data. Bruce McClary, vice president of communications for the National Foundation for Credit Counseling (NFCC), explains:
“[Implementing a freeze] locks down the credit report, which makes it harder for others to open up accounts in your name or to obtain a copy of your credit report to look at details of accounts you may already have open so that they can commit various crimes.”
As long as you are not looking to apply for a new credit card or loan yourself anytime in the near future, a credit freeze can ensure your information is safe and secure.