Protecting yourself from mortgage and real estate fraud
It is important to know that real estate fraud exists in Canada, how it occurs and how to best protect yourself.
There are various types of real estate fraud. Two types of real estate fraud that may result in financial loss for consumers include title fraud and foreclosure fraud.
Actions to take to protect yourself:
• Contact your mortgage lender first if you are having difficulty making your mortgage payments.
• Consult your lawyer if you wish to give another person the right to deal with your personal assets, and make sure you cancel this right if you don’t need it anymore.
• Consult your provincial land registry office to ensure that the title of your home is in your name.
• Check your credit report regularly to make sure the information is accurate.
• Consider getting title insurance. Title insurance covers losses related to title fraud and legal expenses to restore a title. There are two types of insurance:
• Lender Title Insurance – Protects the lender until the mortgage has been paid off.
• Individual Title Insurance – Protects the homeowner from losses as long as he or she owns the home, even if there is no mortgage.
Types of Real Estate Fraud
Title Fraud
Title fraud starts with identity theft, which occurs when your personal information is collected and used by someone identifying themselves as you. There are many ways your identity can be stolen without your knowledge – including:
• Dumpster diving – going through trash to find documents.
• Mail box theft – stealing confidential information from doorsteps.
• Phishing – posing as a legitimate website with the intent of defrauding online visitors.
• Computer hacking – breaking into someone’s personal information on their computer without them knowing.
• Skimming - using a data storage device to capture the information at an ATM or during a merchant transaction.
• Finding personal information you share on the Internet.
• Stealing your wallet or purse.
Title fraud occurs when a stolen identity is used to assume the title of a property and sell the home or get a new mortgage. For example, if you already own a home, a criminal could fraudulently discharge your current mortgage, transfer the title, secure a larger mortgage and put the home under their own name.
Once the money from the sale or new mortgage is advanced, the criminal can leave with the money. You might not be aware of the fraud taking place until after it has been committed. You may find out once the mortgage lender contacts you about mortgage payments you have not made, or someone knocks on your door claiming to be the new owner of the house.
Foreclosure Fraud
Foreclose is the legal process where a mortgage lender takes possession of a consumer’s home and sells it to cover the mortgage debt the consumer has incurred but has been unable to pay.
In a near foreclosure situation, a criminal will take advantage of the situation by offering the homeowner a loan to cover expenses and consolidate loans, in exchange for up-front fees and an agreement to transfer the property title to the criminal.
The criminal could also sell the house or re-mortgage it and leave with the money. In the end, the homeowner will lose the house and still be in debt.
*Source Financial Consumer Agency of Canada
Dealing with A Fraud Situation If You're a Victim
As soon as you discover that you might be a victim, you should:
• Contact the Canadian Anti-Fraud Centre at 1-888-495-8501.
• Report the situation to the police, and record the police report number.
• Report the fraud to the two credit-reporting agencies, Equifax Canada and TransUnion Canada.
• Contact your provincial land registry office as soon as possible. Find out what laws may exist in your province to protect you if you are a victim of real estate fraud.
• Contact your financial institution. Keep all of the documents that provide evidence of the fraud. Record the name of the person you spoke to at the bank, as well as the date and time you called and when you became aware that you are a victim of fraud.
It is important to know that real estate fraud exists in Canada, how it occurs and how to best protect yourself.
There are various types of real estate fraud. Two types of real estate fraud that may result in financial loss for consumers include title fraud and foreclosure fraud.
Actions to take to protect yourself:
• Contact your mortgage lender first if you are having difficulty making your mortgage payments.
• Consult your lawyer if you wish to give another person the right to deal with your personal assets, and make sure you cancel this right if you don’t need it anymore.
• Consult your provincial land registry office to ensure that the title of your home is in your name.
• Check your credit report regularly to make sure the information is accurate.
• Consider getting title insurance. Title insurance covers losses related to title fraud and legal expenses to restore a title. There are two types of insurance:
• Lender Title Insurance – Protects the lender until the mortgage has been paid off.
• Individual Title Insurance – Protects the homeowner from losses as long as he or she owns the home, even if there is no mortgage.
Types of Real Estate Fraud
Title Fraud
Title fraud starts with identity theft, which occurs when your personal information is collected and used by someone identifying themselves as you. There are many ways your identity can be stolen without your knowledge – including:
• Dumpster diving – going through trash to find documents.
• Mail box theft – stealing confidential information from doorsteps.
• Phishing – posing as a legitimate website with the intent of defrauding online visitors.
• Computer hacking – breaking into someone’s personal information on their computer without them knowing.
• Skimming - using a data storage device to capture the information at an ATM or during a merchant transaction.
• Finding personal information you share on the Internet.
• Stealing your wallet or purse.
Title fraud occurs when a stolen identity is used to assume the title of a property and sell the home or get a new mortgage. For example, if you already own a home, a criminal could fraudulently discharge your current mortgage, transfer the title, secure a larger mortgage and put the home under their own name.
Once the money from the sale or new mortgage is advanced, the criminal can leave with the money. You might not be aware of the fraud taking place until after it has been committed. You may find out once the mortgage lender contacts you about mortgage payments you have not made, or someone knocks on your door claiming to be the new owner of the house.
Foreclosure Fraud
Foreclose is the legal process where a mortgage lender takes possession of a consumer’s home and sells it to cover the mortgage debt the consumer has incurred but has been unable to pay.
In a near foreclosure situation, a criminal will take advantage of the situation by offering the homeowner a loan to cover expenses and consolidate loans, in exchange for up-front fees and an agreement to transfer the property title to the criminal.
The criminal could also sell the house or re-mortgage it and leave with the money. In the end, the homeowner will lose the house and still be in debt.
*Source Financial Consumer Agency of Canada
Dealing with A Fraud Situation If You're a Victim
As soon as you discover that you might be a victim, you should:
• Contact the Canadian Anti-Fraud Centre at 1-888-495-8501.
• Report the situation to the police, and record the police report number.
• Report the fraud to the two credit-reporting agencies, Equifax Canada and TransUnion Canada.
• Contact your provincial land registry office as soon as possible. Find out what laws may exist in your province to protect you if you are a victim of real estate fraud.
• Contact your financial institution. Keep all of the documents that provide evidence of the fraud. Record the name of the person you spoke to at the bank, as well as the date and time you called and when you became aware that you are a victim of fraud.
