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Avoiding Identity Theft in Real Estate Transactions

By Sadiya Anjum


Identity theft can result in empty bank accounts, maxed out credit cards, new accounts opened under your name or a ruined reputation that may chase you forever. Identity theft is when someone assumes your identity to obtain access to your finances, finds reasons to blackmail or frame you for a crime. How relevant is this to you? Very. It is most likely that you have been warned several times before but you can never be too careful as identity fraud is continuously on the rise.

It becomes extremely important to be on the alert when applying for a loan or just conducting any real estate deal. Risk of getting your identity stolen is pretty high. The paperwork is always elaborate and your personal information is passed through so many people. In addition, people are unaware of the various documents involved and any corrupt lender or middle-man could take advantage of this. So here are a few handy tips to avoid this when dealing with real estate deals.

The most important thing is to never give out your social security number, debit/ credit card numbers over the telephone, email or fax. For any situation, this is applicable unless you are super positive with whom you are dealing with. To run a credit check for mortgage loans your social security number is required. Make sure you hand it over only in person. In case you have obtained your credit reports by yourself, this should be handed over in person too. Do not give out passwords to your credit reports online.

You will receive the Housing and Urban Development (HUD) and Real Estate Settlement Procedures Act (RESPA) statements detailing the money transactions involved in a real estate property dealing on the closing day. Your social security number should not be written on the forms of the above documents and should be provided on the closing day.

You have to fill out a form for the Internal Revenue Service called a W-9 form. You have to provide the Taxpayer Identification Number (TIN) and a certificate of the same. Make sure that your certificate is handed over to the right people and is not faxed or mailed.

You are asked to put down your social security number on real estate purchase contracts. Avoid putting your number down here. Instead provide the closing agent with a separate W-9 form.

It is highly recommended for all parties involved in a transaction to have a Client Identity Protection Program (CIPP). This will help prevent to a large extent any client identity to be stolen.

When you head to real estate law firms, escrow companies, mortgage origination companies etc. find out how they dispose out-dated files. These should be destroyed by shredding or burning them. Apart from this, make sure that they have fax and email security.

These guidelines should minimize your chances of identity theft in real estate transactions. But you also need to take several steps in your daily life to ensure the same. The general rule is to properly dispose (by shredding) all unnecessary items containing your personal information and giving out the same only to those relevant. Stay alert before someone steals a lot more than just your name.

Article Source: - Home Selling and Home Renting made easy.

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