It's been estimated that the average amount stolen in title fraud is in the range of $300,000; a lottery winning for fraudsters but a nightmare for homeowners. How can homeowners shield themselves from title fraud? Simple, with title insurance.
What is Title?
For such a small word-title-its importance can't be overstated when it comes to owning your home. When you buy a home, you buy the title to the property, and it means you're the registered owner.
How Can Someone Steal Your Home?
Fraudsters-through a combination of identity theft, impersonation, and forgery-can steal the rights to your home's title or mortgage your property.
Four real life examples of title fraud in Canada:
- An impostor posing as the Ontario homeowner transferred the home to another impostor, who in turn obtained a mortgage worth almost $300,000. The lender, then registered the mortgage against the property, leaving the true homeowner responsible for going through the stress and cost of proving that the mortgage was fraudulently registered.
- The elderly owner of a B.C. rental home died and his widow began proceedings to transfer the property to her name. It was at this time when it was discovered that an impostor had posed as the deceased owner (posthumously) and transferred the property to someone else, after which a $320,000 mortgage was taken out on the property. It took three years for the rightful, true owner to convince the courts that the impostors fraudulently obtained the house's title and took out a mortgage.
- A property owner, trying to pay his property's taxes was told that, according to municipal records, he no longer owned his home.
- A Toronto homeowner rented her home to a nice couple, or so she thought. Before their lease expired, the couple created a fake version of the homeowner who sold the home to another individual who was also in on the scam. This buyer, registered a $250,000 mortgage on the home, took the cash, defaulted and disappeared, leaving the real homeowner holding the bag.
With real estate title fraud, the burden of proof is on the victim to show that an actual crime has happened; which is often tricky because of identity theft. Title insurance can give you the protection you need by covering legal expenses and costs incurred in the process of proving a fraud had been committed.
Whether you're buying a new home, or have lived in your home for years, title insurance can protect the single largest investment most Canadians make in their life: their home. Get a quote for title insurance in Canada today.
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