Can Someone Really Steal My Home?

Since today is Halloween I thought I’d lead with a scary question, and it’s one I hear a lot more often these days, especially now that your TV is filled with ads targeting homeowners with just that claim. Should you be concerned – yes. Should you be scared – no. Here’s what I can tell you:

1. Ownership of real estate in Michigan is established by a legal document called a deed. The seller/transferor of the property signs a deed that “transfers” his or her interest in the real estate to the new buyer/transferee. You can imagine the confusion and problems with these deeds if they get lost or destroyed. “Who owns the property” can become a nightmare without the deed. Enter the county Register of Deeds which keeps a record of all deeds that are sent to them for recording.  The Register of Deeds is supposed to review the deed for many things, including accuracy of property description and ownership. Staffing issues and electronic recording make the accuracy checks more challenging.
2. When you buy real estate you want to make sure the seller is legitimate. Enter title insurance, which is what a buyer pays for so that a title company covers the risk of a problem, like a prior deed that was improperly drafted or an undisclosed lien on the property. Title insurance typically covers the buyer up to the point of closing, but not too long after that. A fraudulent title transfer years after the sale will not be covered by the title insurance policy that covered the closing date.
3. So, can someone take ownership of your home without you knowing it? The short answer is no, not legally. But someone can claim to be you and forge your signature on a deed and then try to record it. Heck, in the world we live in anything is possible.

Before you start to sweat, know that while on the rise, fraudulent deed transfers are still fairly rare, and often happen with properties that are neglected. Still, there are things to know to protect yourself.

1. A new Michigan law (MCL 565.371) will help deter fraudulent deed transfers. It is now a felony to draft or record a deed with intent to deceive anyone about the validity of the document. In addition, the law empowers the county Register of Deeds to refer questionable documents to the county prosecutor for investigation.
2. You can check the status of the deed to your home by visiting your county Register of Deeds office to request the most recently recorded deed. Some Register of Deeds office (Oakland and Macomb, for example) also provide a very good online deed search service or a way to request a notice if a document is filed on your property or in your name. Check your county’s website.
3. An existing mortgage can make a deed transfer more challenging because the mortgage is recorded and a payoff and release is typically required on a deed transfer.
4. Real estate ownership usually has bills associated with the property, including utilities and property taxes. If you stop getting bills or see a different name on the bill, you should look into the matter.
5. Of course, the big question people want to know is should they pay for some type of title monitoring. Like any service, it will depend on what you get for your money. I will point you to the Federal Trade Commission Consumer Protection website to review the August 26, 2024, article: Home title lock insurance? Not a lock at all | Consumer Advice. From what I read there, the main point of the alert is to remind consumers that you aren’t getting insurance that will reimburse you, but a monitoring system that proports to alert you after the fact about a deed filing. I am unaware of any of these services being able to prevent a transfer before it happens. If you are considering a service, ask the following questions:
   1. How do you monitor?
   2. How frequently do you monitor?
   3. What are you monitoring for?
   4. How and when will you let me know about an issue?
   5. What will you do to help me if a fraudulent deed is recorded?

Identity theft is on the rise everywhere, including in the area of real estate ownership. You need to be alert. I don’t have an opinion as whether you should buy a third-party monitoring service because I don’t use one myself, but I do know there are some effective ways to monitor your deed on your own and I hope this helps you to better understand your options.

Fun Fact: The Rüppell’s Griffon Vulture is the highest-flying bird, known to have reached an altitude of 37,000 feet (over seven miles!). How do we know this you might ask? Because one collided with an aircraft at that altitude in 1973 and damaged the engine. After the plane landed they identified the remains as the Griffon Vulture.

Debit Card v. Credit Card-What’s Best for You?

You have two big options when it comes to the plastic card we all pull out of our wallets to pay for things. They all might have 16-digit card numbers and expiration dates, but one big difference relates to whether using it creates a loan or a direct withdrawal from your bank account.

Credit cards allow you to borrow money from the credit card company, up to a certain limit, to purchase items or pay for services. When you use a credit card you are getting an interest free 30-day loan from the credit card issuer. If you don’t pay it back in full by the next billing deadline, then interest begins to accumulate on the unpaid balance.

Debit cards allow you to spend money directly out of your bank account, and thus the transaction causes an immediate deduction to your bank balance. There is no borrowing involved when you use your debit card. If your bank account doesn’t immediately have funds to cover the transaction, either the purchase won’t go through, or you will be subject to overdraft fees on the account.

Which card type if best for you? It depends on what you deem to be important. Here are the factors:

1. If you want to build a credit history to enhance your credit report, then the credit card helps. On-time payments, low credit utilization ratios (i.e. relatively small purchases compared to your limit) help build your credit score…but the opposite is also true. If you are late on payments or max out the card frequently your credit score will take a hit. Debit cards have no effect on your credit score because they are direct payments from your bank account.
2. If you want guardrails for your spending, then a debit card is the way to go because you can only spend what’s in the account (or be subject to overdraft fees). Because it’s a loan, you don’t have to consider how much you have in the bank when you whip out a credit card. Some people get into financial trouble and high interest debt with a credit card. That’s difficult to do with a debit card.
3. If you want the option to dispute a purchase after the fact, the credit card wins. The Fair Credit Billing Act allows credit card users to dispute purchases through the credit card company. With a debit card, the money is out of your account by the time you put the debit card back in your wallet, and you have to get the merchant to reverse the transaction — Not so easy.
4. Fraud protection is important. Credit cards always had the advantage here, but more debit card companies are starting to add fraud protection, too. However, since a debit card is linked directly to your bank account, a fraudulent purchase can immediately drain your account while credit card fraud has no immediate impact on your bank account because you pay for it later.
5. Debit cards don’t have an annual fee while credit cards do. But credit cards offer cash back rewards while debit cards have much more limited cash benefits. This one’s a toss-up.

There is no right answer in the debit card vs. credit card debate. It all depends on what factors are most important to you. I hope the factors above help in deciding what’s best for you.

Fun Fact: Halloween pumpkins derived from Irish immigrants. Irish folklore includes the story of “Stingy Jack” who when he died was not allowed into Heaven or Hell and so he wanders the earth for eternity. To keep him away from their homes, people in Ireland would carve scary faces out of turnips to display. When Irish immigrants moved to America, they found pumpkins more prevalent and bigger to carve on, so they started using them to carve “jack-o’-lanterns” to ward off souls trapped between worlds as well as evil spirits.

All I See Is Gold

The words above are often attributed to Egyptologist Howard Carter when, on November 26, 1922, he first peered into the tomb of Tutankhamun. It’s not really what he said (see the Fun Fact below) but the phrase stuck because of our fascination with that mystical precious metal.

Gold has always been the talk of high society, but recently it has become the talk of the financial media, primarily because of the over 50% price run up this year to over $4,000 an ounce. You know things are getting wild when the Wall Street Journal writes about a California welder who has taken up prospecting for gold — complete with metal detector, pick and shovel.

Should you have gold as part of your investment strategy? There’s no simple answer. Although I do have an opinion that I will share. First, let’s be clear about some facts about gold:

1. Not all “gold” is the same. There are two categories: bullion and collectible coins. Bullion can be bars or coins, but the only value is in the gold itself as determined by its weight. Collectible coins can have a value over their weight in gold because of the history and rarity of a particular coin.
2. Actual physical gold is a pain in the neck to store and keep safe, for obvious reasons.
3. Physical gold is not so easy to turn into cash. You just can’t hand it to a banker and get paid the spot price (the current market price) in crisp new bills. You must go through a gold dealer, who will give you (sometimes much) less than the spot price because he or she needs to make a profit on the resale. In addition, physical gold appreciation can be taxed as a collectible at a 28% tax rate, which is higher than the typical 20% capital gains tax rate.
4. You don’t have to own physical gold to get some investment exposure. There are gold ETFs, which are investments that represent a specific amount of gold and the ETF fund itself stores and protects the physical gold. For those folks who want gold in their safe just in case Armageddon arrives, the ETF doesn’t cut mustard. If you’re just looking for a convenient way to get some gold investment exposure, then the ETF route can make sense.

Here’s my opinion on gold as part of your investment strategy. It’s hard for me to get my arms around calling gold an investment because it doesn’t produce anything. No profit sharing, no dividends, no interest. It just sits there, and when people find a reason to be more scared than usual (right now it’s the fear of the US dollar’s crumbling international reputation) than there’s a very human reaction to rush for gold, and thus demand peaks. When the crisis subsides, so does demand and thus the price of gold.

In fact, in the last 45 years, gold ($800/oz in 1980) has gone up 5X while the standard inflation measure has gone up 4.14X. Gold has barely risen faster than inflation, and if not for the huge run up in the last 10 months it would not have a stellar track record against inflation over the last 45 years. Stocks, as represented by the S&P 500 have gone up 62X during that same period. Is there really any question as to the better inflation hedge?

Let me conclude with a real-life scenario. My wife and I do own physical gold – 10 one oz coins that my father-in-law gave to us decades ago. I store them in a safe spot but still get nervous about them from time to time. I guess I can value them at $40,000 for the moment. I always joke that if the world goes crazy, I will cut each coin into quarters so we can buy food and gas–but I will likely never spend them. I don’t really need the value for support, and they have a sentimental value to my wife. We will probably give them to our kids or grandkids as gifts years from now…and then they will hold them for decades until they do the same. Gold…fun and interesting to hold? – definitely. An important part of your investment portfolio? – Not in my book.

Fun Fact: When British Egyptologist Howard Carter first opened King Tut’s tomb and pushed his candle inside his assistant asked, “Can you see anything?” Carter paused for a time to let his eyes adjust to the darkness and then said “Yes, wonderful things!” There was surely lots of gold, including a gold death mask currently valued at $2 million and a gold coffin valued at $1.7 million. The collection is insured for over $900 million dollars. Tutankhamun became king at age 9 and died at age 19.