Title Fraud
Recent news stories have highlighted the dangers of real-estate title fraud, which occurs when fraudsters or scam artists steal ownership of a home to benefit from its value.
CBC News recently reported on a number of cases in the province of Ontario. In one such case, the homeowners left Canada for work overseas only to learn months later upon their return to Canada that their property had been sold without their knowledge by people using fake credentials and identification.
What is Title Fraud?
Title fraud takes place when a person uses fake identification or forged documents to steal the identity of a homeowner and take away their “title,” or legal ownership of a property.
Once fraudsters have their hands on a property’s title, they can re-mortgage it, sell it to an unsuspecting buyer, or extract value from it in some other way and make away with the proceeds.
Homeowners often don’t learn about what’s happened until they receive notice of missed payments or they try to sell, title insurance company First Canadian Title (FCT) says on its website.
How can you protect yourself and your property?
You can take steps to protect your identity
Government-issued identity documents, including driver’s licences, passports, birth certificates, social insurance number (SIN) cards and citizenship cards, can all be used to apply for mortgages or to take steps to buy or sell a home.
The Canadian Anti-Fraud Centre offers the following tips for preventing identity theft:
Be wary of who you share personal information with.
Regularly check credit card reports, and bank and credit card statements and report anything irregular.
Shred documents containing personal information before placing them in the garbage.
Limit mail theft by regularly retrieving mail.
Notify the post office, financial institutions and other service providers of your new address when you move.
Another Important Step to Take is to Get Title Insurance
What to Know About Title Insurance.
There are many insurance products when it comes to your home, but not all are created equal. Potential homeowners may encounter one such insurance policy called “title insurance”.
This particular insurance is designed to protect residential or commercial property owners and their lenders against losses relating to the property’s title or ownership. In fact, it is so important to lenders that every single lender in Canada requires you to purchase title insurance on their behalf. It is not a requirement to have coverage for yourself, but that doesn’t mean you should dismiss it outright.
While title insurance can protect you from existing liens on the property’s title, the most common benefit is protection against title fraud.
Title fraud typically involves someone using stolen personal information, or forged documents to transfer your home’s title to him or herself – without your knowledge. The fraudster then gets a mortgage on your home and disappears with the money. As the old adage goes: “It’s better to be safe than sorry” and the same goes for insurance.
Similar to default insurance, title insurance is charged as a one-time fee or a premium with the cost based on the value of your property. This insurance typically runs around $300 for the lender and $150 for the individual. It can be purchased through your lawyer or title insurance company, such as First Canadian Title (FCT).
Industry experts are urging homebuyers to purchase title insurance as part of closing. Tim Hudak, CEO of the Ontario Real Estate Association (OREA) recently described title insurance as “the best safeguard” for homebuyers.
Title fraud protection for existing homeowners
Title insurance is still an option for homeowners after they take possession, even years later. But once an issue like fraud is discovered, it can be too late to provide coverage. According to Daniela DeTommaso, President of FCT, the best time to purchase a title insurance policy is now.
“There’s no reason you shouldn’t be getting title insurance, just like you wouldn’t buy a house without property and casualty insurance,” she explains. When a homeowner with a title insurance policy learns their title has been stolen, they benefit from more than just their coverage.
“The title insurance company also has a duty to defend,” says Daniela. “That means that the minute we find out [title fraud] has happened, we step in and we protect [the insured]. We pay all of the costs.”
Those costs include the legal fees to restore a homeowner’s title, which can be in the tens of thousands, as well as the costs of investigating the fraud and handling all the legal processes.
“It’s not only compensating for that significant loss,” Daniela continues. “It’s also just providing that peace of mind knowing that someone’s going to navigate this process for you, and any costs […] having to prove that you are who you say you are.”
If you are wanting to know more about title insurance, or confirm that you (and your home) are properly protected, don’t hesitate to reach out to a Dominion Lending Centres mortgage expert today for a mortgage review!
Sources:
http://https://www.cbc.ca/news/canada/toronto/prevent-title-insurance-fraud-1.6711615
https://dominionlending.ca/mortgage-tips/the-importance-of-title-insurancehttps://dominionlending.ca/sponsored/how-can-homeowners-protect-themselves-against-title-fraud