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Protect yourself from title fraud

Title fraud is a daunting problem for all stakeholders in real estate, and it’s not just an Ontario problem; it affects the industry across Canada and the United States. Investigators at a conference in crime and prevention in Toronto in December called mortgage fraud an epidemic in the developed countries. The Ontario government has responded to increased concern and, in December, passed legislation that will strengthen protections against real estate fraud, with fines increased for $1,000 to a possible $50,000.

In the US, in the fall of 2004 the FBI warned that their open mortgage fraud investigations had increased five times in three years. They reported 533 open files and a single one of those files could be dealing with losses of over $100 Million. In 2005 the FBI reported 170 convictions with losses of over $1 billion.

These are big numbers, yes, but real estate transactions always involve huge sums, so why is this crime such a problem now? Kathleen Waters, LL.B., Vice-President of TitlePLUS, suggested real estate has become a commoditized business. "In the 1950s and 1960s it was quite common to know the client," she said. Clients lived in your community, or you knew of them or their family members. But with more transactions happening with clients that you don’t know "that leads to the possibility that they may not be who they say they are," she said.

There is no absolute way property owners can protect themselves from title fraud, but there are some measures they can take to minimize the chances of a fraudster stealing the rug, and their home, out from under them. Here are some suggestions:

January 11, 2007 in Legal Considerations | Permalink

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Comments

Title Fraud is more difficult now that lenders are required to get ID from mortgage clients and Teraview also controls who has access to registrations. However Title Insurance is a good idea because nobody knows what the next fraud is going to look like.

Posted by: Darrin Gruenig | Mar 27, 2012 12:54:38 AM

Great tips on how to protect yourself!

Posted by: FirsTrust Wichita | Mar 26, 2012 4:03:40 PM

I believe that Ontario passed a law that increases the fines for mortgage and related frauds. This is a step in the right direction.

Posted by: Snap Up Real Estate | Jan 11, 2007 12:10:27 PM

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