May 15, 2018

Are You Protected From Mortgage Fraud?

You may have heard people at the café talk about “Mortgage Fraud”, or “Title Fraud.” Or, perhaps you hear a story about how someone came back from vacation only to find that their house was sold while they were gone!

So, is this an urban legend, or does it happen? Yes Mortgage Fraud (or Title Fraud) does happen! We can suggest a few steps to make it less likely to happen to you.

What is Mortgage Fraud?

There are many different types of Mortgage Fraud. We discuss ‘Fraud for Title’.

Fraud for Title is when someone poses as you and changes the title on your home, or takes out a mortgage on your house under your name.

The fraudster uses fake documents and your stolen identity. The bank lends the money to the fraudster, assuming they are actually you. The fraudster takes the loan money, and leaves you holding the bag: the debt in your name, and registered against your title.

Another twist on “Fraud for Title: the fraudster could also use these fake documents and your stolen identity to sell your house to an unsuspecting buyer.

What You Can Do

While it is almost impossible to fully prevent these frauds from happening, there are some ways to protect your property.

You should monitor your property titles, as well as your credit rating account. Also, any confidential banking or identifying material (social insurance, date of birth, etc.) you throw away should be shredded before you throw them out.

If you keep your mortgage registered against your property (even if you’ve paid it off), it adds another hurdle for the fraudster, because they would need to try to remove the mortgage from title, to sell it. This would alert the bank. It complicates things for the fraudster. If the fraudster tried to borrow more against your property, the new bank would also look into the prior mortgage, before lending more money against the title.

If you happen to find yourself the victim of title fraud, all hope is not lost. In Alberta the title to one’s home is insured through the Land Titles Act.  If your title is fraudulently conveyed by someone forging your signature or someone fraudulently registers a mortgage on your title, the Provincial Government guarantees that you will be reimbursed for your losses.  Yes, you will have to prove your claim in a court of law, but once you get a judgment then the government will pay you if you can’t recover from the fraudster.

If you have any questions about title fraud, or if you or your company own properties that you wish to protect, please call our Business and Corporate Law group, today. We will be happy to help you with your needs. If you want more information about our business law services, there are more articles here.