| Real Estate Market

Most of us worry about someone breaking into our homes and stealing our most precious possessions, but how many worry about someone stealing our actual house? While the idea of criminals carrying your home away is absurd, real estate fraud is a clever crime based on falsifying records or identity to commit large-scale theft. It poses a real threat that can only get worse, given the capabilities of AI. Here we share common real estate fraud scenarios, with advice on protecting yourself against this new-ish crime impacting Toronto homeowners.

Scenario #1: Identity Theft and Fraud

Imagine opening your mail one day to discover a letter from your bank informing you they are foreclosing on your home. You know you’ve diligently made payments and have the paper trail to show it, yet here is the letter in black and white telling you that you have defaulted on your mortgage. Guess what? Identity thieves have used your personal information to convince the bank they own your home and have taken out an equity loan in your name, using your home as security. They have absconded with the money, and because the payments on the loan were never made, the bank is taking action to recoup their losses via your home. 

In this case, criminals have stolen your identity and used it to apply for loans using your home as collateral. This is the ultimate slap in the face for these types of crimes, as they have not only gotten away with potentially hundreds of thousands of dollars but also left you to pay the piper by losing your home. 

How to protect yourself from identity theft and fraud

  • Never, ever share your personal or financial information over the phone or click a link on a text or email that wasn’t from someone you know – even if the link looks legit. 
  • Become obsessed with checking your credit reports, bank, and credit card statements to look for irregularities and immediately report them to your bank. 
  • Never dispose of documents with personal information without shredding them. 
  • If your snail mailbox is accessible, always grab your mail every day to reduce the risk of people stealing statements from the bank, the CRA, credit cards, etc. Better yet, put a lock on your mailbox. 
  • Make sure the financial institutions and service providers you use always have your most up-to-date address information, preferably shared in writing.
  • Be careful with passwords:
    • Change them frequently
    • Avoid using simple, easy-to-figure-out passwords
    • Use a series of numbers, letters, and punctuation that is basically nonsense
    • Hide your passwords
  • Only carry the stuff you need in your wallet and keep I.D., SIN cards, OHIP cards, birth certificates, age of majority cards, etc., in a safe place.
  • Stop using paper cheques already!

Looking for more resources about buying a home in Toronto? Read these posts next:

Scenario #2: Foreclosure Fraud

You find you’re unable to keep up with your mortgage payments. As time passes, you feel desperation sink in and try to find a solution to make your payments more manageable through your mortgage provider with no luck. Miracle of miracles, you find a loan company willing to help you. They’re surprisingly sympathetic, offering to pay off your current mortgage, take it over so you have lower payments, and guarantee you won’t lose your home. All you have to do is provide them with your title information and start making unbelievably low monthly mortgage payments. The next thing you know, you receive notice from your original mortgage lender that they are foreclosing on your mortgage. Don’t look now, but that kind and caring loan company just took your title, stole your monthly payments, and possibly even took out further loans using your home as collateral. You’re left losing your home anyway.

In this case, criminals have posed as lenders, started stealing your mortgage payments, and possibly also taken out a home equity loan using your title. 

How to protect yourself from foreclosure fraud

  • As soon as you know you’ll miss a mortgage payment, speak to your mortgage lender to ask for assistance and renegotiate your payments if possible.
  • If you’re trying to find credit to manage defaulted mortgage payments, only deal with licensed or accredited brokers. 
  • Consult with a lawyer or fully read documents before signing anything related to your home ownership, mortgage, or title. 
  • Never make commitments involving your mortgage and home title without consulting a lawyer. 
  • Research companies offering loans and second mortgages to homeowners with poor credit to ensure they are legit.  

Ever heard of ‘due diligence’ in real estate? Find out everything you need to know about in our blog right here.

Scenario #3: Title Fraud

You’re binge-watching White Lotus when you hear a ruckus outside your home. You go to the window to see a large moving van pulling up and a couple walking up your path with a key in their hand. As you start to puzzle over what is happening, you hear the key slide into your front door and then a lot of jiggling and useless door handle turning. In horror, you think someone is trying to break in, so you call the police. Meanwhile, the couple have made their way to the back of the house and are now trying to get in the back way. The police arrive, and suddenly, you and the couple are frantic, trying to explain that you own the house and aren’t doing anything wrong. Wait, what? 

In this case, a real estate agent somewhere in the GTA has seriously (or in some cases intentionally) dropped the ball. Why? Criminals have somehow managed to steal the title of your home, using your stolen personal information to seek out your assets and bank information. They then posed as homeowners and hired an unwitting, seriously unqualified, inexperienced real estate agent. They convinced the agent that your property was theirs to sell, and the agent went through the motions without giving it a second thought. Mind-boggling! 

Thinking about selling soon? Read these posts next:

How to protect yourself from title fraud

  • Get title insurance.
  • Take the same precautions we listed for identity theft and foreclosure fraud.
  • Make sure the seller’s agent for your home purchase removes all signs of images, videos, property information, etc., from the old listing once you purchase the home so fraudsters can’t access them and use them when committing title fraud. 

Aside: What is Title Insurance?

Title insurance provides backup to help resolve theft and fraud. The title insurance company launches an investigation and covers all expenses related to the process to prove you retain title ownership. They also hire a lawyer to represent you and prove your case. The insurance is purchased with a single premium payment that the insurance company bases on the value of your property. Although not as popular in Ontario as it is throughout the U.S., an increase in Toronto title fraud cases is an excellent reason to talk to a title insurance broker.  

Read more about title insurance on our blog right here.

What To Do If You Suspect Real Estate Fraud

When following our advice to track your financial information obsessively, it is important to contact all your financial service providers when you feel suspicious activity is occurring on your accounts. Remember to write down the date and amount before calling the institution. Record the date and time of the conversation, take down the representative’s name, and then file a complaint with the police to launch an investigation. Finally, contact TransUnion and Equifax to put a fraud alert on your credit report. Criminals will be automatically denied if they try to take further advantage of your finances. 

Real estate fraud is not a pretty picture. It is disturbing and can leave you wondering how you suddenly fell into hopeless debt, became homeless, or lost your home to unsuspecting home buyers. Your best defense is to protect your financial and personal information, only deal with legitimate, well-known financial institutions, and consider protecting your home ownership through title insurance. 

Call The Christine Cowern Team at 416.291.7372 or email us at hello@christinecowern.com with any questions you have about Toronto real estate. We’d love to work with you!