Fraud: how it can affect you
- Stealing title: when the crook changes the ownership or title of your property into his/her name. The crook may intend to sell the property or mortgage it behind your back. In either case, the criminal is fraudulently impersonating you and/or forging your signature.
- Obtaining an illegal mortgage: when the criminal leaves title or ownership in your name, but puts a mortgage on it illegally. Once again, you (and the lender under the mortgage) are the victim of an impersonator and/or forger.
- Value fraud: where you are tricked into believing the property is worth considerably more than it is. Remember that there is nothing necessarily illegal in Canada about buying low and selling high, unless it involves fraudulent concealment or intentional misrepresentation (such as giving you a forged appraisal or fraudulent “comparables”.)
Why is real estate fraud happening?
Real estate fraud is a continent-wide, if not global, phenomenon. So, there is nothing unique about Canada that is making our properties vulnerable to it.
It is likely related to the upsurge in identity theft, which is reported regularly in the media. As population centres have grown in North America and people have become more mobile, those involved in the real estate industry (such as sales agents, mortgage brokers, lenders and lawyers) are less likely to know all of their clients on a long-term basis. When towns were small and everyone knew each other, it was pretty difficult to impersonate a local landowner to steal title!
These developments are compounded by the rise of the Internet, which makes obtaining a mortgage loan, for example, more convenient while (to some extent) de-personalizing the process.
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