Two types of real estate fraud have been on the rise in the past year: (1) fraudsters impersonating homeowners and (2) fraudsters tricking homeowners into registering several mortgages on their homes at “discount rates”. Where homeowners are impersonated, fraudsters are using stolen IDs to sell or mortgage properties, and once they’ve done so, disappear with the proceeds. Did you know that dozens of homes in the GTA have been sold or mortgaged without the owners’ knowledge? The second type of fraud usually targets vulnerable homeowners who cannot qualify for a traditional loan. They end up with several mortgages on their homes under terms they never understood or agreed to, failing to receive the mortgage proceeds offered by the lender.
Thankfully, there are things you can do for yourself and your clients to reduce the likelihood of them becoming victims of fraud. Of course, we always recommend buyers to purchase title insurance which will protect them against losses related to the property’s title or ownership. In Canada, there are four title insurance companies: Stewart Title, Chicago Title Canada, First Canadian Title, and TitlePLUS. At Axess Law, we also utilize cutting-edge technologies, including machine learning algorithms, to analyze real-time patterns, anomalies, and behavioral characteristics for prompt identification of potential fraudulent activities. While we do not meet with a lot of our client’s in person, we employ the best technologies to mitigate against the risk of fraud and verify the identification of our clients.