After years of hard work you have finally paid off your house. Your credit cards are paid off and the kids are off on their own. You are debt free! Then one day the Sheriff shows up on your door with an eviction notice because you have not been making your payments on your Home Equity Line of Credit…but wait…you don’t have a Home Equity Line of Credit!! Guess again…
Home Equity fraud is the fastest growing form of identity theft in the US right now. Identity thieves are now looking for people with excellent credit and little debt. Why? Homeowners who own their homes outright and have very little debt may be less likely to check their credit reports as often as they should according to studies done by the FBI and Identity Theft Watch groups.
How does this work? To start, even without your social security number a person can pretty easily find out if you own your home free and clear. Most counties have very accessible websites that provide the public records of your mortgage release and Deeds of Trust. These thieves will target affluent neighborhoods, go to the county website and plug in the name and address. Bingo! All your information pops up.
Even though there are much tighter restrictions in place regarding loan documents, it is still fairly easy to create and or falsify the documents required to get a loan. This includes everything from pay stubs to tax returns. Most banks/mortgage companies have online applications and ways to send e-docs and e-signatures so that you never even have to go to the bank to get a loan. It can all be done over the internet. The ability to do this makes it all the more attractive for identity thieves.
If you already have a Home Equity line of credit but rarely use it you can also be a prime target. Identity thieves with very little information can easily hack into our bank accounts and start draining your line of credit without you ever knowing about it. That is until the bank starts calling and wondering where their payments are which typically does not happen until you are 60 days late. By then the entire line could have been wiped out and your credit destroyed.
What’s the best way to prevent this from happening to you? If you have an existing line of credit that you rarely use, contact the bank and make sure that they have your account marked so that if any charges do show up that they call you to make sure they were charges you made. And check your credit report. Even if you own your home free and clear and you have little to no credit card debt, it is very important that you check your credit. You can do this for free once a year at annualcreditreport.com. Or you can sign up with a credit monitoring service that will notify you immediately if anything suspicious looking shows up on your reports. Either way, a little proactive activity on your part can save you from a lot of headache down the road…