- A Canadian couple recently learned their home had been sold without their consent while they were out of town.
- Toronto police are searching for two people involved in a complex fraud scheme.
- Industry veterans say these types of cases are “definitely unique to this point in time”.
- Mortgage and title fraud appear to be on the rise since 2020.
- Ron Usher has called for a national investigation to determine the root causes and if more can be done to protect homeowners in Canada.
A Canadian Couple’s Home Sold Without Their Consent
A Canadian couple recently learned the hard way that their home had been sold without their consent while they were out of town.
Toronto police have been searching for two people involved in a complex fraud scheme that saw them use fake identities to pose as the owners of the home and successfully sell it to unsuspecting buyers.
The real owners of the home had been out of the country for work since January 2022 and only learned that their home had been sold without their knowledge months later, after noticing that their mortgage payments had disappeared from their bank accounts.
Since then, similar stories from other property owners in Toronto have emerged, and investigators say these once-rare cases of property title fraud appear to be on the rise.
Types of Fraud
Industry veterans say these types of cases are “definitely unique to this point in time” and have never seen anything like it, especially when it comes to the level of sophistication used to carry out these crimes.
Schemes related to home or property ownership can typically occur in two ways: mortgage fraud and title fraud.
Mortgage fraud is typically more common and is carried out when a fraudster uses fake identification documents to place a second mortgage on a house they don’t own, usually when the first mortgage has been nearly or fully paid off.
Title fraud involves tenants of a vacant home posing as the owner and selling that home to earnest buyers, resulting in a total title transfer of the property.
Fraud on the Rise
Brian King of King Advisory International Group, a Toronto-based firm that investigates white-collar crime, has observed both mortgage and title fraud increasing in frequency since 2020. John Rider, a vice-president at Chicago Title Insurance Company, said the firm’s Canada branch had only seen two cases of fraud – mortgage and title – between the 1960s and 2019, but are now dealing with dozens.
The BC Land Title and Survey Authority (LTSA) said it is aware of two title fraud attempts since 2020, only one of which was successful.
Experts are puzzled as to why there has been a surge of reported cases, particularly in Toronto.
It’s possible that virtual real estate deals during the pandemic could have made it more difficult to detect fake identification documents.
The pandemic has also forced some people away from their property for longer periods due to travel restrictions.
Perpetrators have a good grasp of the Canadian real estate system and the fraudulent IDs used in these transactions often look authentic.
Real estate in Toronto has significantly risen in value in the last few decades.
Calls for National Investigation
Ron Usher, a general counsel with the Society of Notaries Public in British Columbia, has called for a national investigation to determine the root causes and if more can be done to protect homeowners in Canada.
In most cases, the real owner and the buyer of the house are able to get most of their money back if there is title insurance on the home.
However, the Canadian couple who lost their home to fraudsters are still waiting to find out if they will be able to get their home back.
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