This is a "sales letter" and it is designed to scare you into action. The company uses public records (i.e., Grant Deeds, Deeds of Trust, etc...) to obtain your personal information and targets First-Time Homebuyers, due to their inexperience, and presents the offer in a way that the target (the reader) assumes it is legitimate and is something that needs to be completed and paid.
So what is a Homestead Declaration?
A Homestead Declaration is a legal document and process whereby a homeowner can protect the equity in his/her/their property, not the asset value, but the equity, from creditors. Homestead protection is limited to a homeowner's primary residence. The protection can be lost if the homeowner no longer occupies said residence, but is portable and can be relocated to the new primary residence.
Homestead exemption laws prevent the forced sale of a house to meet the demands of creditors. The laws protect the following:
- the first $75,000 of house equity for single persons
- the first $100,000 of house equity for married couples, or single persons with at least one child
- the first $175,000 of house equity for persons over 65 or legally mentally or physically disabled
- the first $75,000 of house equity for single persons 55 years of age or older with a gross annual income of not more than $15,000, and
- the first $75,000 of house equity for married couples 55 years of age or older with a gross annual income of not more than $20,000
The laws also provide an exemption from property taxes. In California, the first $7,000 of the value of your primary residence is exempt from property taxes. If you need proof, look at your own property tax bill and see for yourself.
You can declare a homestead on your own by filing a one-page document (Homestead Declaration) in the County Recorder's office where your property is located, but it may be redundant since homestead protection is automatic in California.
Consider this article a "heads up" since I am not a lawyer and would not presume to give you legal advice. You may wish to consult with a legal professional for all the details on how this may apply to you. However, perusal of your personal property tax bill may satisfy your curiosity as to whether you are protected or not. My desire is simply to protect you from wasting money on a service that is not only unnecessary, but that you can do for yourself, should you so desire.