ADVICE | MORTGAGE MINUTE
BEWARE OF MORTGAGE AND TITLE
FRAUD ALISA ARAGON-LLOYD
Now a days, with the amount of information that is shared on the internet and social media, identity theft and Ponzi schemes are happening regularly. The last thing you want to worry about is yet another way to lose your hardearned money. But as a homeowner, you need to be aware of crimes on the rise known as mortgage fraud and real estate title fraud. MORTGAGE FRAUD
Some borrowers may think that providing false documents and making false statements are not a big deal. However, Canada’s Criminal Code clearly states that obtaining funds, including mortgages by providing false information, is a crime.
The most common type of mortgage fraud involves a criminal obtaining a property, 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. The following are some red flags for mortgage fraud: • Someone offers you money to use your name and credit information to obtain a mortgage. • You are encouraged to include false information on a mortgage application. • You are asked to leave signature lines or other important areas of your mortgage application blank. • The seller or investment advisor discourages you from seeing or inspecting the property you will be purchasing. • The seller or developer rebates you money on closing, and you don’t disclose this to your lending institution.
20 New Home + Condo Guide | Dec. 11, 2021–Jan. 8, 2022
TITLE FRAUD
When you purchase a home, you purchase the title to the property. Your solicitor registers you as the owner of the property in the provincial land title office. Title fraud normally starts with identity theft. This occurs when your personal information is collected and used by someone identifying themselves as you. There are several ways criminals can steal your identity without your knowledge that include: • Dumpster diving • Mail box theft • Phishing • Computer hacking Sadly, the only red flag for title fraud occurs when your mortgage mysteriously goes into default and the lender begins foreclosure proceedings. Even worse, as the homeowner, you are the one hurt by title fraud, rather than the lender, as is often the case with mortgage fraud. Unlike with mortgage fraud, during title fraud, you haven’t been
