The rise in home prices and increased virtual transactions since the pandemic have inadvertently given scammers new opportunities for mischief. This has prompted an urgent need for homeowners to be vigilant against real estate fraud, a menace that can result in devastating financial losses.
Let’s explore the common types of real estate fraud, shed light on how it works, and most importantly, share invaluable tips from an experienced insurance investigator in Ontario, ISN, on how homeowners can safeguard their properties.
Understanding Real Estate Fraud
Title Fraud
This occurs when fraudsters pilfer the title to your home, subsequently selling it or applying for a new mortgage without your knowledge. Typically, title fraud starts with identity theft, where personal information is stolen, allowing scammers to impersonate the homeowner.
Foreclosure Fraud
Targeting those struggling with mortgage payments, fraudsters employ tactics to coerce homeowners into transferring their property title in exchange for a loan. The fraudsters pocket payments made by the homeowner and gain control of the property title, often leading to resale, or refinancing without the homeowner's consent.
Mortgage Fraud
Also known as application fraud, this transpires when false information is provided on a mortgage application, potentially impacting the applicant's ability to secure credit or future mortgages.
Total Title Fraud: A Deceptive Web
Total title fraud, a more sophisticated variant, involves impersonation and meticulous planning by fraudsters. The first type occurs when a fraudster, armed with a fake ID, poses as a homeowner. They use details obtained through land title searches and hire a legitimate real estate agent to list the property. Once the sale concludes, the fraudsters empty the account where the funds are deposited.
The second, rarer type involves impostors on both sides—fake homeowners and buyers. The fraudsters thoroughly research the real homeowners, gathering details such as date of birth. Stand-ins are chosen to impersonate them, receiving payment for their role in the elaborate scheme.
Protecting Against Real Estate Fraud: Tips to Consider from an Insurance Investigator
Insurance investigators in Ontario, like those at ISN, play a crucial role in mitigating the risk of real estate fraud. Document examination is their first step to eliminate the possibility of homeowners being involved. They then identify and interview potentially responsible parties, recommend title insurance, and stress the importance of verifying the authenticity of buyers and sellers.
Additional consumer tips include:
Deal only with licensed or accredited mortgage and real estate professionals.
Thoroughly read and understand documents before signing.
Safely store mortgage information.
Contact the mortgage lender first if you are facing difficulties with payments.
Seek legal advice before giving someone authority over your home or assets.
Conduct thorough research on companies or individuals offering loans.
Perform a land title search through the provincial or territorial land registry office.
Consider title insurance as a protective measure against losses from title fraud.
The Canadian Anti-Fraud Centre emphasizes the following preventive measures:
Exercise caution when sharing personal information.
Regularly monitor credit card reports and bank statements.
Shred documents with personal information before disposal.
Promptly retrieve mail to prevent theft.
Update address information with relevant service providers after moving.
Responding to Real Estate Fraud: A Strategic Approach
If you suspect falling victim to real estate fraud, immediate actions are imperative:
Document when the fraud was noticed, and the steps taken.
Contact financial institutions and relevant companies to secure affected accounts.
File a report with local law enforcement.
Contact the provincial or territorial land registry office.
Alert credit bureaus (TransUnion and Equifax) and request a fraud alert on your credit report.
Contact ISN’s Insurance Investigators in Ontario
In a landscape where real estate fraud is becoming increasingly sophisticated, staying informed and adopting proactive measures is the key to protecting one of your most valuable assets—your home. ISN’s expert insurance investigators emphasize that vigilance, due diligence, and a cautious approach to transactions are paramount in thwarting the plans of fraudsters and securing your property. ISN is a comprehensive security solution that sets the industry standard for protection services in Canada and beyond. Contact us today for more information.