Posted on: 24-03-07 18:04:38
Mortgage Fraudsters Targeting Homes With 'For Sale' Signs
Thursday March 22, 2007
This news item was on City TV
http://www.citynews.ca/news/news_9030.aspx
It's probably the most important investment you'll ever make, but you could be putting your house and your personal information at risk when you put a 'For Sale' sign on your front lawn.
March is Fraud Awareness Month and to mark the occasion an advocacy group and insurance company placed 'Stolen/Not For Sale' signs on front lawns to highlight the dangers of title and identity fraud.
First Canadian Title, the Consumers Council of Canada and title fraud victim Susan Lawrence came together for the event in Don Mills Thursday. When a house goes up for sale fraudsters will look up the owner's information and use that important data to take out a fraudulent mortgage against the home.
Last month Lawrence won a lengthy court battle after her home was snatched out from under her nose by fraudsters in early 2006. Someone pretending to be Lawrence transferred the title of the home into their name and took out a $290,000 mortgage on the property.
'I think it started when I put a 'For Sale' sign on the lawn. Somebody forged a sale document and sold it to another person who got a mortgage for $300,000 and then disappeared with the money,' Lawrence explained.
She was forced out of the house and took her case to court but lost. The court ruled in favour of the mortgage company. But the Ontario Court of Appeal ruled in her favour last month and declared Lawrence isn't responsible for the $300,000 mortgage taken out on her house.
'Susan's story is a perfect example of how - despite existing checks and balances in the system - crooks are able to use someone else's identity to easily commit fraud,' said Bill Huzar, President of the Consumers Council of Canada.
'Not only do consumers need to be vigilant, but it's also up to business, law enforcement and governments to join together in the fight against fraud.'
Lawrence didn't have title insurance on her home so she had to pay all of the legal costs for her case, which totalled about $50,000. Insurance would've covered that expense. The coverage costs about $300 for the average home.
'Title insurance covers you for any loss you suffer because of fraud and we can get compensation back to you quicker than other means that are currently available,' Lorne Shuman of First Canadian Title explained.
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What's The Difference Between Mortgage Fraud and Title Fraud?
Mortgage Fraud: This crime typically hurts financial institutions the most. It's when someone intentionally provides false information to obtain a mortgage they normally wouldn't have gotten.
The most common type of mortgage fraud involves a fraudster obtaining a property and then increasing its value through a series of sales and resales involving the fraudster and someone working in cooperation with them.
A mortgage is then secured for the property based on the inflated price.
Title Fraud: This crime typically hurts individual homeowners the most. This is when a fraudster assumes the identity of a homeowner to transfer the title of their home, sell or obtain a mortgage on the property.
How you can protect yourself from becoming a victim of real estate fraud, courtesy of the Canadian Bankers Association:
Protect your personal information from identity thieves:
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.
If it sounds too good to be true, it probably is - before you reveal any personal information, find out how it will be used and if it will be shared.
Pay attention to your billing cycles. Follow up with creditors if your bills don't arrive on time.
Guard your mail. Deposit outgoing mail in post office collection boxes or at your local post office. Promptly remove mail from your mailbox after delivery. Ensure mail is forwarded or re-routed if you move or change your mailing address.
Minimize the identification information and number of cards you carry.
Keep items with personal information in a safe place. An identity thief will pick through your garbage or recycling bins. Be sure to tear or shred receipts, copies of credit applications, insurance forms, physician statements and credit offers you get in the mail.
Give your Social Insurance Number (SIN) only when absolutely necessary. Ask to use other types of identification when possible.
Don't carry your SIN card; leave it in a secure place.
Check your credit report regularly to ensure there are no discrepancies
Reviewing your credit report can help you find out if someone has opened unauthorized financial accounts in your name. There are three credit reporting agencies in Canada: Equifax Canada, Northern Credit Bureaus Inc. and TransUnion Canada. You can request free copies of your credit report from credit reporting agencies by mail. Online versions of reports are also available for a small fee.
You can also conduct a property search at your province land registry office to ensure that the title to your home is in your name.
Here are some more tips to protect yourself:
Consult public real estate websites to review property listings in the community where the property is located. Compare features, size and locations to establish if the asking price seems reasonable.
Check to make sure your representative is a licensed real estate agent.
Beware of a real estate agent or mortgage broker who has a financial interest in the transaction.
Ask for a copy of the land title or go to a Registry office and ask them to do a historical title search.
In the offer to purchase, include the option to have the property appraised by a designated or accredited member of the Appraisal Institute of Canada.
Insist on a home inspection to guard against buying a home that has been cosmetically renovated or formerly used as a grow house operation. Grow operators frequently use mortgage fraud to purchase their properties.
Ask to see receipts for recent renovations.
When you make a deposit, ensure your money is protected by being held 'in trust'.
Here are some real estate fraud red flags:
Someone offers you a fee to use your name and credit information to obtain a mortgage.
You are encouraged to include false information on a loan application
You are asked to leave signature lines or other important areas on a loan application blank
The seller or investment advisor discourages you from seeing or inspecting the property you are offering to purchase;Courtesy of the Real Estate Council of Alberta
Title fraud can result in the following repercussions for a homeowner, courtesy of First Canadian Title:
The cost of defending one's right of ownership, which can cost tens of thousands of dollars;
The stress and uncertainty surrounding the a resolution of title-related problems;
The time spent waiting for resolution from the Land Titles Assurance Fund; and
The loss associated with a fraudulent mortgage that is entitled to remain registered against the true home owner's interest.
For more information, click here:
http://www.protectyourtitle.com/default.htm
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Pramod Chopra
Senior Mortgage Consultant
Mortgage Alliance Company of Canada
Quote:
Originally posted by Pramod Chopra
It's probably the most important investment you'll ever make, but you could be putting your house and your personal information at risk when you put a 'For Sale' sign on your front lawn.
First Canadian Title, the Consumers Council of Canada and title fraud victim Susan Lawrence came together for the event in Don Mills Thursday. When a house goes up for sale fraudsters will look up the owner's information and use that important data to take out a fraudulent mortgage against the home.
Last month Lawrence won a lengthy court battle after her home was snatched out from under her nose by fraudsters in early 2006. Someone pretending to be Lawrence transferred the title of the home into their name and took out a $290,000 mortgage on the property.
'I think it started when I put a 'For Sale' sign on the lawn. Somebody forged a sale document and sold it to another person who got a mortgage for $300,000 and then disappeared with the money,' Lawrence explained.
Thank you Pramodji for the article.
However, these news items generally do not elaborate what kind of information which is publicly available is enough to get the title fraudulently transferrred. If just the name and address as advertised on MLS is enough, every property is vulnerable to this fraud, and there is nothing that can save you from this hazard. Hope knowledgeable professionals on the forum can shed some light how these are actually executed, just as an eye opener to non suspecting CDs.
On a side note, when we sold our property in India, at the time of title transfer, the buyer and seller were required to go to the registrars office, sign in front of the registrar and the sales deed was documented WITH the Buyer and Seller photographs - I think that was a very good deterrent for property frauds, something that should be followed - if not compulsory, atleast voluntarily in Canada.
Hiren
Obtaining Title Insurance is the key. The fee varies from lawyer to lawyer but usually it only costs a couple of hundred dollars. Not a bad price to protect your home from these fraudsters.
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Vimal Patel, Realtor
Homelife Royalcorp Real Estate Inc., Brokerage
Cell: 416-887-3745
Office: 905-856-6611
Fax: 905-856-6232
vimal.patel@gmail.com
http://www.vimalpatel.ca" rel="nofollow">LINK
Quote:
Originally posted by hchheda
Thank you Pramodji for the article.
However, these news items generally do not elaborate what kind of information which is publicly available is enough to get the title fraudulently transferrred. If just the name and address as advertised on MLS is enough, every property is vulnerable to this fraud, and there is nothing that can save you from this hazard. Hope knowledgeable professionals on the forum can shed some light how these are actually executed, just as an eye opener to non suspecting CDs.
On a side note, when we sold our property in India, at the time of title transfer, the buyer and seller were required to go to the registrars office, sign in front of the registrar and the sales deed was documented WITH the Buyer and Seller photographs - I think that was a very good deterrent for property frauds, something that should be followed - if not compulsory, atleast voluntarily in Canada.
Hiren
1. Publicly available information is available at a cost, which of course is not a deterrent for these people since they would be making thousands times more than the cost. You can go to any Land registry office and pull out the history on any home, mortgagor, mortgagee, balance due, lien etc after paying the fee.
2. Cost of title insurance has been creeping up since the frauds have been increasing. 10 years ago, I paid 150 bucks for it and now it costs around 300. Still not a bad investment considering it is probably the biggest investment of your life.
3. People here do not go to registrar office but rather to a lawyer who has the obligation to verify the credentials of Buyer & seller. Strict Law Society rules apply on how (honestly) they have to conduct the business. But there are a few dishonest people in all professions. Most Lawyers register property online form their offices now.
4. The name of Sellers on MLS is not for Public but for Real Estate professionals. If the professional prints out "client" copy, the names will not show there.
5. I believe that fraudsters are not interested in properties that have mortgage balance owed since these require more efforts on their part to refinance them against the equity. These con men look for paid up properties.
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Rajeev Narula, Broker, REALTOR®
ACE TEAM REALTY INC., Brokerage
10 Kingsbridge Garden Circle, Suite 704
(Opp Square One - HWY10/403)
Mississauga, ON L5R 3K6
Bus: 1-888-355-3155 Ext. 300
Fax: 1-888-443-3155
Email:
Web: http://www.RAJEEV.ca" rel="nofollow">LINK
Quote:
Originally posted by hchheda
Quote:
Originally posted by Pramod Chopra
It's probably the most important investment you'll ever make, but you could be putting your house and your personal information at risk when you put a 'For Sale' sign on your front lawn.
First Canadian Title, the Consumers Council of Canada and title fraud victim Susan Lawrence came together for the event in Don Mills Thursday. When a house goes up for sale fraudsters will look up the owner's information and use that important data to take out a fraudulent mortgage against the home.
Last month Lawrence won a lengthy court battle after her home was snatched out from under her nose by fraudsters in early 2006. Someone pretending to be Lawrence transferred the title of the home into their name and took out a $290,000 mortgage on the property.
'I think it started when I put a 'For Sale' sign on the lawn. Somebody forged a sale document and sold it to another person who got a mortgage for $300,000 and then disappeared with the money,' Lawrence explained.
Thank you Pramodji for the article.
However, these news items generally do not elaborate what kind of information which is publicly available is enough to get the title fraudulently transferrred. If just the name and address as advertised on MLS is enough, every property is vulnerable to this fraud, and there is nothing that can save you from this hazard. Hope knowledgeable professionals on the forum can shed some light how these are actually executed, just as an eye opener to non suspecting CDs.
On a side note, when we sold our property in India, at the time of title transfer, the buyer and seller were required to go to the registrars office, sign in front of the registrar and the sales deed was documented WITH the Buyer and Seller photographs - I think that was a very good deterrent for property frauds, something that should be followed - if not compulsory, atleast voluntarily in Canada.
Hiren
Hi Hiren,
My purpose of posting this article was to bring awareness in the CD members regarding various types of Real Estate/Mortgage frauds and Identity Thefts taking place in the society so that we can take precautions guard ourselves.
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Pramod Chopra
Senior Mortgage Consultant
Mortgage Alliance Company of Canada
Quote:
Originally posted by Pramod Chopra
My purpose of posting this article was to bring awareness in the CD members regarding various types of Real Estate/Mortgage frauds and Identity Thefts taking place in the society so that we can take precautions guard ourselves.
Hi Pramodji,
I do applaud your initiative.
I just pointed out the loop holes in these kind of reporting by the newspaper /TV channel. A complete picture by the reporter would do much better in safe gaurding or protecting the interest of un suspecting individuals - IMHO.
The points Rajeev explained could have easily been incoporated by the original reporter in his/her article - for the sake of clarity.
And finally, I still believe a simple visit to the registrars office by the buyer and the seller at the time of registration of the sale deed should go a long way in reducing these kinds of frauds. Instead of shelling extra $$ for curing the symtomps, it will be time well spent in preventing the disease itself.
Thanks again for the article post.
Hiren
