Protect Your Self from Real Estate Fraud

Real Estate fraud is not as com­mon as oth­er types of fraud such as cred­it card fraud. But the con­se­quences of it are very real and can result in a sig­nif­i­cant loss and expense.  In the worst case sce­nario it could mean los­ing your home!

What is Real Estate Fraud?  The 2 most com­mon types are Title Fraud and Fore­clo­sure Fraud.

In the case of Title Fraud, it starts with iden­ti­ty theft. A thief obtains your per­son­al infor­ma­tion and then iden­ti­fies him­self as you.  Iden­ti­ty theft can occur in a mul­ti­tude of ways, includ­ing every­thing from com­put­er hack­ing, dump­ster div­ing, mail­box theft or break and entry.

Once the thief has obtained your iden­ti­ty he assumes title to your prop­er­ty and either sells your home or obtains a new or larg­er mort­gage on the prop­er­ty.   Once the mon­ey from the sale or new mort­gage is advanced to the thief he dis­ap­pears.  You may not be aware of this fraud until you receive a knock on the door from the per­son claim­ing to be the new own­er, or from the mort­gage hold­er try­ing to col­lect pay­ments.

In the case of Fore­clo­sure Fraud, it is a “legal” process where a mort­gage lender takes pos­ses­sion of a home for unpaid debt, (unpaid mort­gage pay­ments).  The fraud occurs when a crim­i­nal takes advan­tage of a sit­u­a­tion where a home­own­er is hav­ing finan­cial dif­fi­cul­ties pay­ing the mort­gage.  An offer is made for a loan to cov­er expens­es and con­sol­i­date loans, in exchange for upfront fees and an agree­ment to trans­fer prop­er­ty title to the crim­i­nal.  The crim­i­nal will then ignore the agree­ment and not make any pay­ments for tax­es or the mort­gage, keep­ing all pay­ments made by the home own­er. The crim­i­nal could also remort­gage or sell the home and leave with the mon­ey.  In the end the home­own­er will lose the home and be even fur­ther in debt!

How do we pro­tect our­selves from this seri­ous fraud?  The first line of defense is to do every­thing you can to pro­tect your iden­ti­ty.  Read our blog on pre­vent­ing Iden­ti­ty fraud and oth­er use­ful tools can be found on gov­ern­ment web­sites.

Here are some tips to pre­vent falling prey to Real Estate Fraud.

• If you are hav­ing finan­cial prob­lems, and dif­fi­cul­ty mak­ing mort­gage pay­ments:
• Con­tact your lender first.  Your lender wants to help you find a way to work things out, and may sur­prise you with solu­tions.
• Before you give anoth­er per­son a right to deal with your per­son­al assets, con­sult with a lawyer that is work­ing for you, not the poten­tial lender.
• 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. You can get a cred­it report for free by mail­ing your request to one of the two cred­it report­ing agen­cies, Equifax and Tran­sUnion at least once a year.
• Con­sid­er get­ting title insur­ance. Title insur­ance cov­ers loss­es relat­ed to title fraud and legal expens­es to restore a title. There are two types of title insur­ance, for lender pro­tec­tion and or indi­vid­ual pro­tec­tion when there is no longer a mort­gage.

If all these tips fail and you believe you are the vic­tim of Real Estate fraud.  Con­tact the Cana­di­an Anti Fraud Cen­tre (CAFC), a nation­al anti-fraud call cen­tre, at 1–888-495‑8501 or info@antifraudcentre.ca).  You should also report the sit­u­a­tion to the police, and record the police report num­ber. Report the fraud to the two cred­it-report­ing agen­cies, Equifax and Tran­sUnion.  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.