Types of Fraud?
Title Fraud is typically referred to as mortgage fraud, real estate fraud or property fraud; it is a growing problem in Canada and across North America.
The three main fraud types affecting the real estate industry in Canada are:
1. Title Fraud — when the ownership or title of your property is fraudulently changed, typically through identity theft or forged documents which will allow a fraudster to illegally sell or refinance the property.
2. Mortgage Fraud — is a scheme used to obtain a mortgage from a lender under false pretenses, also known as application fraud. Mortgage Fraud typically uses Private Lenders to borrow money because Title Insurance Companies leave exceptions to fraud coverage for Private Lenders.
3. Value Fraud — where a lender is led to believe a property is worth more than it really is through concealment or intentional misrepresentation of the property’s attributes and value.
Who can participate in Title Fraud?
Title Fraud is usually initiated by a person or a concentrated group of people. It typically involves persons who are sophisticated and have had experience in the transactional field of real estate, including Mortgage Brokers, Realtors and Lawyers. The fraudster typically recruits real estate professionals unknowingly through convincing identity theft, lack of red flags or just negligent professionals. Fraudsters don’t just limit themselves to mortgage free seniors , they can go as far to impersonate legal professionals, or abuse the Title System itself.
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