Title fraud could harm homeowners without their knowledge

For some homeowners, this could potentially become a nightmare scenario.
For some homeowners, this could potentially become a nightmare scenario.

Recently a group of fraudsters allegedly participated in a $17-million scheme falsely claiming to own various high-end properties.

According to Toronto Police, four men secured mortgages on properties they didn’t even own and they were all arrested and charged with various fraud and forgery charges.

But just how did these guys almost get away with it?

Typically, the con artists would produce false title and property insurance documents to prove they owned homes that they didn’t. They are then able to take out mortgages on those properties, leaving the true owners potentially stuck with a mortgage they didn’t even receive the funds from!

These frauds are expected to rise in Canada, according to S&P Global Ratings, who said its data showed a 52 per cent increase in fraud since 2013, prompting the ratings company to recently lower a key risk point.

For some homeowners, this could potentially become a nightmare scenario.

A Mississauga, Ont., homeowner discovered a lien had been placed on her home in 2012, after she was advised that Manulife had granted someone else a $640,000 loan on her home.

Lukrezia Buzanic told Global News that she never did receive the money, but because of a lien, she cannot sell her home.

Most of these cases come down to identity thefts, say experts. Stealing physical mail from a home that contains key identifying information or sending out shady email links are just some of the ways these fraudsters can glean enough information to make a mortgage application.

Experts continue to warn people to keep a regular eye on their credit file through the two reporting agencies in Canada, Equifax and TransUnion. That can help you spot strange mortgage or loan accounts on your record that you didn’t ask for.

What can consumers and homeowners do to protect against it?

According to the Financial Consumer Agency of Canada, you should keep your mortgage information in a safe place and shred any old documents. You can also do a land-title search on your property, just to make sure no other mortgages or loans are attached to it.

And the agency suggests buying title insurance which may protect against any losses due to title fraud.

The problem could be huge. According to title insurance company FCT, there have been $198 million in “suspicious mortgage transactions since 2012.”

 

 

The Canadian Bankers Association (CBA) advises Canadians “Do not give out personal information on the phone, through mail or over the internet unless you have initiated the contact or know with whom you're dealing.”

They also strongly advise against carrying around a SIN card: it should be left at home in a safe place, the CBA says.

The old saying applies more than ever: If it sounds too good to be true, it probably is!

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