Although Real Estate Fraud isn’t the most popular type of fraud in Canada it does have a huge financial impact to its victims. It is important to understand how Real Estate Fraud happens and more importantly how to protect yourself against it.
There are two types of Real Estate Fraud: Title Fraud and Foreclosure Fraud.
Title Fraud
When you purchase a new home, you buy title to the property. In turn your lawyer who completes the transaction will register you as the owner of the property in the appropriate provincial land registry system.
Title Fraud begins with identity theft. Some of the common ways fraudsters steal your information is mail box theft, garbage sifting, computer hacking and phishing.
Once your identity is stolen the thieves use your identity to assume the title of the property and either sell the home or get a new mortgage. The thieves could discharge your current mortgage, transfer the title, secure a new larger mortgage and put the home in their name.
Since most real estate fraud involves identity theft its important to protect yourself from being a target
Once the mortgage funds are given, the criminals can leave with the money. You as the rightful owner are not usually aware that this has taken place until long after the crime has been committed. You usually find out when the new mortgage lender contacts you looking for payments or someone knocks on the door claiming they own the house.
Criminals typically target homes that no longer have a mortgage, so they can maximize the amount of money they are able to steal or if you rent some or all of your house, which can allow the renter to gain greater information about your property.
Since most real estate fraud involves identity theft its important to protect yourself from being a target. Regularly checking your credit bureau and ensuring you have title insurance.