How Title Fraud Happens And How To Protect Yourself
Real estate fraud in Canada is a booming business, and while the vast majority is perpetrated against financial institutions in the form of mortgage fraud, it's title fraud that hits home and strikes fear in homeowners. After all, if you're the victim of title fraud not only has someone likely stolen your identity, but they've also stolen the title to your home.
How Title Fraud Happens
Title fraud often boils down to acts of identity theft, impersonation and forgery. Two well documented and reported instances of title fraud illustrate how title fraud can happen.
Real-life title fraud examples:
- 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.
Title Fraud Targets
Any homeowner can be a target, however, according to the Title Insurance Industry Association of Canada, fraudsters, thieves and impostors are apt to go after homes that are mortgage-free, rented, unoccupied, or have been recently purchased, transferred, mortgaged or remortgaged. As well, fraudsters tend to target homeowners who travel frequently, spend a fair bit of time out to the country, or are in the middle of settling a divorce and are divvying up the property.
How Often Title Fraud Happens
"In 2009, we were flagging suspicious residential frauds about once a week. That average has increased to almost twice a week, five years later. The value of these transactions is dropping as well. I think fraudsters may be trying to slip smaller transactions by us as they may believe that a higher value mortgage may be subject to greater scrutiny," stated Eric Haslett, Vice President & Chief Underwriter at FCT.
How To Protect Yourself From Becoming A Victim Of Title Fraud
Title fraud typically starts with identity theft, and according to the Office of the Privacy Commissioner of Canada, thousands of people are victims to identity theft a year. If identity theft can lead to title fraud, then title insurance can help you from becoming a victim a third time; because with title fraud, the onus is on you to prove that you're a victim of fraud. 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 home, or have owned your home for years, title insurance can help you keep your home, your home, and no one else's.
FCT is the title insurance company featured at KANETIX.ca. As the Canadian arm of one of world's largest title insurers, FCT is the leading provider of title insurance in Canada. Since 1991, FCT has been helping Canadians protect their property.
Insurance provided by FCT Insurance Company Ltd. For specific coverage and exclusions, refer to the policy. Copies are available upon request. Policies are subject to underwriting criteria.