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Real estate fraud

Two types of Real estate fraud

Title fraud
Title fraud happens when the title to your home is stolen, and then the fraudster sells the home or applies for a new mortgage against it. Title fraud usually starts with identity theft, which can happen if somebody steals your personal information.

Foreclosure fraud
Foreclosure fraud usually happens when you are having problems making your mortgage payments. You may be tricked into transferring your property title to somebody to get a loan that will help you make your payments. Fraudsters usually keep the payments you make and also possess the title to your home, which they can resell or remortgage.

Source : Government of Canada

Modus operandi

Modus operandi observed by the SPVM during title fraud

  • Fraudsters impersonate property owners and use false identification when signing deeds.
  • The mortgagee is generally a private lender who agrees to make a short-term loan (between 6 to 12 months) in view of fast resale (real estate flip), often at high rates.
  • The targeted residence is visited by the private lender or an interested third party who is not aware of the scam and a real estate broker is often on the premises.

Prevention tips

  • Learn about title insurance to protect yourself against real estate fraud. This insurance covers the costs in a civil suit for fraud.
  • During a residential visit by private lenders, potential buyers or tenants, ask questions to understand their interests.
  • Make real estate agents aware of this type of fraud so that they are vigilant during visits to your property.
  • Protect your personal financial information. Never give out your personal information over the phone, email or Internet unless you have initiated the contact yourself or know the person you are dealing with.
  • Pay attention to your billing cycles and check with your lenders if you see any irregularity.
  • Watch your mail. Make sure mail is re-routed or forwarded if you change your address.
  • Keep items with personal information in a safe place. Make sure you rip or shred receipts, copies of credit card application forms, insurance forms, doctor statements, and credit offers you receive in the mail. Minimize the information that identifies you and the number of cards you carry.
  • Give your Social Insurance Number (SIN) only when absolutely necessary and avoid keeping your card on you.
  • Regularly check and revise your credit report with Equifax and TransUnionCanadato make sure there are no discrepancies.
  • Conduct a property search with your province’s land registry office to make sure your home’s title is in your name.
  • Speak to your mortgage lender first if you have difficulty making your mortgage payments.