Real estate fraud is a broad term used to describe the different types of fraud that the real estate industry faces.
Mortgage fraud
Mortgage fraud is a type of real estate fraud that most often hurts the financial institutions that lend money for purchasing property. The most common form of mortgage fraud involves fraudsters acquiring property and then artificially increasing the property’s value through a series of sales and resales between the fraudster and someone in cooperation with them. A mortgage is then secured on the property based on the price that has been artificially inflated.
Title fraud
Title fraud is a different type of real estate fraud that most often hurts individual homeowners. In comparison to the more than two million real estate transactions that occur each year in the province, there are a limited number of cases of title fraud. The most common forms of title fraud involve fraudsters using stolen identities or forged documents to transfer a registered owner’s title to himself or herself without the registered owner’s knowledge. The fraudster then obtains a mortgage on this property and once the funds are advanced on the mortgage, he or she disappears. This type of fraud is also sometimes referred to as “mortgage fraud.”
Protect your property by protecting your identity
Ontario’s land registration system has a proven track record for security, accuracy and efficiency. Property owners in this province can trust in a constantly improving system that has introduced automation, electronic registration and enhanced security to land registration. The system is built on 200 years of legal and regulatory best practices, using the best technology currently available.
However, in any system, it is impossible to completely avoid fraud. Ontario homeowners can take an active role in protecting their property by protecting themselves from identity thieves. Fraudsters have been known to impersonate the owner of a property by obtaining false identification and then transferring property that does not belong to them. To help avoid this situation:
- Always store personal information, including your birth certificate, Social Insurance Number card, bank account numbers and credit card details, in a secure place that others cannot access.
- Never carry your birth certificate or SIN card in your wallet.
- Shred documents, such as credit card statements, before you discard them.
- Never reply to spam or e-mails that ask for banking information, credit card details, passwords or other sensitive information involving property you own.
- Check references from prospective renters if you are renting your property and be sure to check on your rental property regularly.
Be alert to identity theft
Pay attention to the following in order to detect fraud early:
- Tax statements or bills are unexpectedly mailed to your home, addressed to a different individual.
- You receive a phone call from a caller inquiring about a new mortgage that has already been arranged for your property.
- Bills do not arrive as expected.
- Creditors contact you regarding purchases you did not make.
- There are discrepancies in your bank or credit card statements.
Power of attorney
Another way in which you can protect yourself is by being cautious when granting power of attorney. Whenever you give another person a power of attorney that permits them to deal with your personal assets, you should consult with your lawyers or advisers regarding appropriate limitations.
Title insurance
Consumers can also talk to their lawyers and advisers about alternative methods of protection, including the benefits of purchasing title insurance.
I am a victim of real estate fraud. What do I do?
If you think you have been defrauded out of your property, it is important to
act quickly. Follow these steps to get help:
- Report what happened to your local police department.
- Tell your lawyer or adviser about your concern.
- Contact your local Land Registry Office or the Director of Titles.
Depending on your circumstances, you may also want to:
- Speak with someone at your bank.
- Contact Canada’s two national credit-reporting agencies (Equifax Canada and TransUnion Canada), and ask that a “fraud alert” be put on your credit report. Ask them to send you a copy for your review.
Consumers can also talk to their lawyers and advisers about alternative methods to protecting themselves, including the benefits of purchasing title insurance.
Contact information
Director Of Titles
Title and Survey Services Office
20 Dundas Street West
Toronto, Ontario M5G 2C2
416-314-4882
www.gov.on.ca/mgs
Ontario’s Land Registry Offices – Ontario is the world leader in land registration and the first jurisdiction in the world to provide electronic land registration. For information on what services are offered by your local land registry office, please visit:
www.gov.on.ca/MGS/en/FAQ/STEL02_047246.html
Identity Theft Statement and Information Package
http://www.phonebusters.com/images/IDTheftStatement.pdf
PhoneBusters – A national anti-fraud call centre jointly operated by the Ontario Provincial Police and the Royal Canadian Mounted Police.
1-888-495-8501
www.phonebusters.com
Equifax Canada – One of Canada’s national credit-reporting agencies.
1-800-465-7166
www.equifax.ca
TransUnion Canada – One of Canada’s national credit-reporting agencies.
1-877-525-3823
www.tuc.ca