Homeowners With Excellent Credit Are New Targets of Identity Thieves

Too many identity theft victims find out later that they could have taken steps to prevent identity theft or reduce the havoc it's created in their lives. The recent rise in home equity fraud perpetrated by identity thieves has some homeowners wishing they'd been a bit more proactive in protecting their homes, their credit scores, and their equity.

Identity theft watchdog groups are saying that people who have excellent credit scores and have paid off or nearly paid off their homes should be extra-vigilant about checking their credit reports. In a trend that's caught many ID theft analysts off-guard, identity thieves are targeting homeowners with good credit and substantial equity in their homes to commit home equity fraud.

Like all scammers, identity thieves like an easy mark.  Homeowners who pay off their mortgages and have excellent credit are increasingly popular targets for thieves, since they're often lax about checking their credit scores and credit reports. With great scores, lots of equity in their homes, and little need for credit, these homeowners have little to worry about, right? Wrong.

Each year, the Federal Bureau of Investigation issues a mortgage fraud report. In 2008, the FBI report cited home equity fraud as an "emerging scheme" in a real estate market that saw home values plummeting and mortgage default rates skyrocketing.

In the report, the FBI cited examples of homeowners in affluent suburbs who had little or no principal left to pay on their mortgages and were shocked to learn that thieves had obtained their personal information. The criminals used the information to get home equity loans worth tens of thousands and, in a few cases, hundreds of thousands of dollars. In most instances, the identity theft victims had no idea that creditors had placed liens on their homes until a sheriff's deputy showed up with an arrest warrant.

Wealthy or not, every consumer has a responsibility to proactively monitor their credit and protect themselves from identity theft. Identity thieves count on their victims' complacency about credit to commit home equity fraud and other types of identity theft.