Protecting Yourself from Mortgage Fraud in Canada

By
Mortgage and Lending with Mortgage Central Nationwide M08005776

Mortgage fraud and title fraud are the most devastating types of real estate fraud in Canada. Although real estate fraud in general hurts homeowners, victims of mortgage fraud and title fraud can lose the only home they have and end up homeless.

What is the Difference Between Mortgage Fraud and Title Fraud?

"Title fraud involves someone masquerading as the homeowner to sell the home or get a mortgage loan from the home" says Danny Papadapoulis, a mortgage broker with Homebase Mortgages based in Toronto. Mortgage fraud involves intentionally submitting inaccurate, incomplete, or fraudulent information to the lender to get approved for a mortgage that the homeowner does not qualify for. In most cases of mortgage fraud, there is usually a claim for a higher income, use of falsified appraisal of the property, or fake identifications. These can be discovered by counterchecking submitted documents for veracity.

Is Mortgage Fraud a Big Problem in Canada?

Mortgage fraud affects lending institutions and the banking industry profoundly. The homeowner who got approved for a mortgage that they cannot truly afford also stand to lose their home with just a minor financial mishap in the future. "This is why organizations that are involved in real estate, the banking industry, and the police take mortgage fraud seriously" says Calvin Barry, a criminal lawyer in Toronto. Unfortunately, there is no central agency that records incidences of mortgage fraud and those that discover it seldom report it; hence, there is no real statistical data that can gauge how prevalent is mortgage fraud in Canada.

Are Banks Working to Prevent Real Estate Fraud?

Banks have plenty of measures in place to identify and prevent cases of real estate fraud. They work with private investigators, real estate task forces, law enforcement, as well as their own security teams to catch criminals and develop better ways to protect against mortgage fraud and other types of real estate fraud. More so, the Canadian Bankers Association work with lenders, the legal profession, and other organizations to continually make changes to deter those who may be inclined to commit real estate fraud.

Protect Yourself from Mortgage Fraud

Fraudsters will take advantage of any weakness to commit fraud. As an individual, you must report suspicious activities and actively protect your personal data to avoid it getting used for fraud. Michael Porter, a fraud expert with Haywood Hunt & Associates Inc, says "If you own your home and want to prevent mortgage fraud and title fraud, then be sure to observe the following measures:"

  • Refrain from giving out personal data via phone or email especially if you did not initiate contact with the people asking for your details.
  • Make sure all bills arrive on time and are not intercepted by identity thieves.
  • Safeguard your mail. Update addresses when moving to another place and do not leave mail in the mailbox.
  • Protect items with personal information such as phones, laptops, tablets, packages, memory cards, and the like. If throwing them out because they are no longer of use, be sure that important data are no longer readable or are already erased.
  • Keep your Social Insurance Number Card in a safe place. Do not use your SIN unless necessary.

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