REAL ESTATE and TITLE FRAUD

 

REAL ESTATE and TITLE FRAUD

 

Recently in the news we have been hearing about cases of homes being sold by other parties without the knowledge of the real owners. Many of us are scratching our heads wondering how this can be possible. Much easier than you think. In my almost three decades in the lending and mortgage industry, I have seen my fair share of dubious mortgage finance and real estate transactions. As a professional, in real estate or mortgages, you have to be extra vigilant because the reward for real estate and title fraud to the fraudsters can be quite beneficial.

In a recent publication by the Canadian Broadcasting Corporation, they identified as much as thirty properties that have been sold or mortgaged without the owner’s knowledge or consent. The article also alluded that the frauds may be work of organized crime syndicates.

 

“CBC Toronto has learned that a handful of organized crime groups are behind these real-estate frauds — in which at least 30 homes in the Greater Toronto Area (GTA) have either been sold or mortgaged without the real owners' knowledge. Those revelations come from a private investigation firm working for a title insurance company to try and get to the bottom of the scams, which are costing insurers millions in claims.” (“How organized crime has mortgaged or sold at least 30 GTA homes without ...”)

 

Real estate or title fraud occurs when fraudsters get access to the personal information of homeowners; name, birth date, social insurance number and copies our information of the property’s title usually found on the deed. The more common type of fraud is usually to arrange mortgage financing on a property that is free and clear (mortgage free) or has a small mortgage. The individuals who have assumed the identity of the real owners, will sign all the lender documents and required documents with the solicitor’s office and access all the funds from the new mortgage. The victims of this type of fraud are usually elderly individuals and property owners who may live out of province or state or out of country.

The process of selling a home fraudulently is very similar to acquiring a mortgage fraudulently but may perhaps require much more detailed coordination as the process involves third parties that may or may not be a party to the fraud, along with the fact the listing and selling process can take several months.

So how do we protect ourselves from this type of fraud?

• 1.    The first would be to check your credit profile frequently on all the credit reporting agencies; Equifax, TransUnion and Experion. This would alert the homeowner to any credit inquiries that they did not authorize.
• 2.    Also, you can also put alerts on your credit profiles where a text message or email is sent to you to acknowledge the credit inquiry before it can be done.
• 3.    Be extremely careful who has access to your identification and other personal information.
• 4.    Destroy old copies of property deeds that are no longer relevant and keep current copies in a safe and secure place.
• 5.    Have title insurance – this is an insurance property that protects homeowners and (mortgage lenders) against losses related to the property's title or ownership, including from title fraud.
• 6.    Have someone you trust register a small mortgage against your home. This could be a trustworthy family member, friend, or a lawyer. Any new mortgage financing or property sale will require this mortgage to be discharged and will trigger an alert.

As our world becomes more digital, the access to personal information could easily get into the wrong hands causing us significant grief and financial loss, not to mention the amount of time it could take for the innocent part to remedy the situation.