It's On The Rise.... And It Isn't Pretty: Title And Mortgage Fraud (Part 1)

Mortgage and title fraudsters who impersonate homeowners and tenants have targeted at least 30 properties in Ontario investigators and official warnings suggest.

Insurance investigator Brian King, president and CEO of King International Advisory Group, stated “this includes six instances of “total title fraud” in which con artists pose as homeowners to list properties for sale and sell the property quickly.”

King said such impersonators have had to put in performances worthy of an “Emmy Award,” but they were not the only people involved in the scam.

His firm was handling six claims of total title fraud, with several coming forward after recent media coverage of the fraud technique.  “What you have to understand is that the people that are doing this, it’s a group. It takes several people to make this process work,” said King.

King’s investigations include the case of Toronto owner Moffy Yu, who discovered that her 2-bedroom downtown condo had been listed and sold last year for $970,000 by someone using her name.

The property’s title now lists someone else as the owner, although a “caution” notice has been placed on the document by the director of land titles, indicating that it is disputed. Toronto Police confirmed they are investigating.

King said total title fraud was once “very, very rare,” but now it “seems like every other file that’s coming in is a total title transfer,” and that title and mortgage fraud typically involve homes with low or no mortgages. After identifying such a home, the fraudsters research the homeowners to create fake identification in their name.

He said “actors” are then paid $5,000 to $10,000 to put the property on the market and seek a “fairly quick” sale with an unsuspecting buyer. They are not necessarily going for the most amount of money because they want to deal with this quickly. The quicker they get in and out, the better.”

One of the recent cases his firm investigated, involved a GTA home valued at $2.2 million.

The true owners contracted a property management company to rent out their home after moving to England for work. But it was rented by fraudsters who moved in, impersonated the owners, and sold it for $1.7 million within two weeks.

In another type of property fraud, impersonators pose as homeowners to obtain mortgages from private lenders, said King. Compared to total title fraud, he explains that mortgage fraud was much “easier and quicker.” And the potential payoff for total title fraud was much greater.

“When they sell to an unsuspecting (buyer), they get not only the mortgage amount, they get the equity amount as well.”

He said total title fraud resulted in a legal “mess” that could take a year and a half for the courts to sort out.

Daniela De Tommaso, president of First Canadian Title Company Limited, said the firm had seen a “definite rise” in title fraud.

Although he could not say how many cases it had received, Tommaso said it was growing, although it involved “small numbers” but the sophistication of fraudsters was increasing.

He advises that people with home title insurance who were targeted by fraudsters could hand the matter over to their insurance company to “step in and take over”, contacting the police, notifying all parties involved, and hiring lawyers to fix the problem. But in some cases, the homeowners would balk at the lengthy court proceedings and walk away from the property, taking a payout instead.

The largest learning from this is that title fraud shows the importance of seriously protecting personal information. When you are getting rid of any bank documents, bills and etc. make sure you are shredding them. You don’t want your bank account numbers, your social insurance and other personal information out there.Another measure is to request an alert on title activity on your property, such as someone attempting to place a mortgage on it.

How do you take steps to protect your identity? Stay tuned for Part 2, in next week’s Blog.