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Defending Your Canadian Dream: 9 Actions to Take Against Title (and Mortgage) Fraud

Portrait Andrew Schulhof

#303-1338 West Broadway
Vancouver
British Columbia
V6H 1H2

Mortgage fraud is a persistent issue that can have serious negative impacts on your life. You need to know how to protect yourself against it so you can have some peace of mind.

With all the news about the importance of housing these days, not losing it to theft is vital to all properties owners.

Owning a home or investment property in Canada is more than just a financial milestone—it’s often considered one of life’s greatest achievements and a cornerstone of financial stability for many Canadians. It’s a symbol of your hard work and aspirations for the future.

However in today’s digital age, with increasing cybercrime where fraudsters are becoming increasingly sophisticated, safeguarding your property from mortgage and title fraud is paramount. In Canada, mortgage and title fraud are real concerns that can jeopardize your investment and financial security.

In this blog, we’ll delve into what title fraud is, how it can affect Canadian home and property owners, and the steps you can take to safeguard your Canadian home and or investment properties under Canadian law.

Although mortgage fraud and title fraud are different, I included them both together,  because they are so often interconnected. The main focus here will be title fraud as it relates directly to the ownership of the property.

What is Title Fraud?

Title fraud, also known as deed fraud or property fraud, occurs when someone fraudulently assumes ownership of your property by transferring the title to their name. This can happen through various means, including identity theft, forged signatures, or fraudulent property transfers. Once the fraudster gains control of the title, they may attempt to mortgage the property or sell it without your knowledge, leaving you at risk of financial loss and legal complications.

How Does Title Fraud Affect Canadian Homeowners?

Title fraud can have devastating consequences for Canadian homeowners, including financial losses, damage to credit scores, and legal battles to reclaim ownership of their property.

Victims of title fraud may find themselves facing foreclosure, eviction, or hefty legal fees to rectify the situation. Moreover, the emotional toll of discovering that your home or investment property has been stolen can be significant, causing stress, anxiety, and uncertainty about your financial future.

Fortunately, there are proactive steps you can take to mitigate these risks and safeguard your Canadian home under Canadian law. Here are nine proactive steps you can take under Canadian law to protect your Canadian home and or investment properties.

 

1) Secure Your Personal Information

In this world where data breaches are all too common, shoring up your cyber defenses is crucial. Invest in reputable antivirus software, use strong, unique passwords for all your online accounts, and be wary of phishing attempts or suspicious emails requesting sensitive information.

Protecting your personal and financial information is crucial in preventing fraud. Be cautious about sharing sensitive details, such as your social insurance number, banking information, and property documents. Shred documents containing personal data before disposing of them.

Safeguard documents such as property titles, mortgage agreements, and identification papers in a secure location, like a safety deposit box, a locked cabinet, or safe. In Canada, when there is a financial charge against a property such as a mortgage, secured line of credit, a HELOC, etc. the risk of title fraud is reduced, but where there is no financial charge against the property (i.e. free and clear title) there is a significantly greater risk.

Each Canadian province has their own land title registration authority system and it is best to seek professional legal advice about how titles are registered and can be protected. In BC, if you have a mortgage free property, one sure fire way to prevent title fraud is to pull and secure the Duplicate Indefeasible Title Certificate (DIT) from the Land Title Survey Authority (LTSA). This effectively freezes the title ensuring that no entity can place a charge on title or even transfer the property to any other party. It is vital that if you take this step that you safeguard this document and do not lose or destroy it, as it becomes an incredibly expensive and painful process to resolve it.

2) Stay Informed

Knowledge is your best defense against fraud. Stay informed about the various types of fraud that can affect homeowners in Canada, including mortgage fraud, title fraud, identity theft, and property flipping schemes. Understanding how these scams work empowers you to recognize warning signs and take appropriate action.

As a homeowner, it is wise to keep abreast of news and developments in the real estate industry especially in your pertinent real estate market and educate yourself about the warning signs of title fraud.

As a real estate investor, familiarize yourself with current property values, rental rates, and market trends in your markets. Being well-informed allows you to detect any irregularities or suspicious activity related to your property.

3) Monitor Your Credit Report

Your credit report can be a treasure trove of information, providing early warning signs of potential fraud. Regularly monitoring your credit report can help you detect any unauthorized activity, such as new accounts opened in your name or unfamiliar inquiries into your credit history.

In Canada, you are entitled to request a free copy of your credit report from each of the major credit bureaus Equifax and TransUnion annually. Make it a habit to monitor your credit report regularly and carefully for any unusual activity, such as unauthorized credit inquiries or accounts opened in your name and report any suspicious activity immediately. You can sign up for alerts with both major credit bureaus so that you are on top of changes.

4) Verify Property Ownership

Verify the ownership of your property regularly by obtaining a copy of your property title from the land registry office connected to the locations of your properties. Ensure that the information on the title matches your records and that there are no unauthorized changes or registrations. Any discrepancies should be investigated promptly, as they could be indicators of fraudulent activity.

5) Embrace Title Insurance

Consider purchasing title insurance for your property. Title insurance provides coverage against losses resulting from title defects, including fraud.

While not mandatory in all Canadian provinces, title insurance can offer added protection and peace of mind for homeowners. Consult with a real estate lawyer or insurance provider to understand your options and the benefits of title insurance in your province.

Title insurance acts as a safety net, it does not prevent or eliminate or even reduce the risk of title fraud, title insurance offers an easier path of compensation should title fraud occur. Consult with a real estate lawyer or insurance provider to explore your options.

6) Stay Vigilant and Verify All Requests for Information or Transactions

Vigilance is paramount to protecting your home from fraud. Stay alert to any red flags, such as unexpected changes to your mortgage or property documents, missing mail, or unusual financial transactions. Trust your instincts and investigate any suspicious activity promptly to prevent further harm. Whether it’s a request for sensitive information or a transaction involving your property, always verify the legitimacy of the request before providing sensitive details or signing documents.

Be cautious of unsolicited offers or requests, and don’t hesitate to seek a second opinion or clarification if something seems amiss. If something doesn’t feel right, don’t hesitate to investigate further or seek professional advice. Whatever you do, don’t click on the link in the suspicious email.

Look at the sending email address carefully as some look legitimate with logos etc. Go to the institution’s website mentioned or better yet phone the institution/person/entity directly.

 

7) Build a Trusted Network 

Surround yourself with a trusted network of professionals, including real estate agents, lawyers, and financial advisors. These individuals can provide invaluable guidance and support in navigating the complexities of property ownership and safeguarding your investments. And when communicating with lenders, lawyers, or other parties involved in real estate transactions, ensure that you use secure communication channels.

Avoid sharing sensitive information via email or over the phone unless you are certain of the recipient’s identity and the security measures in place.

8) Seek Legal Advice

If you suspect that you have been a victim of title fraud or if you encounter any suspicious activity related to your property title, seek legal advice immediately.

A real estate lawyer can guide you through the steps to protect your interests and reclaim ownership of your property. Time is of the essence in such cases, so it’s essential to act swiftly to mitigate any potential losses.

9) Educate Others

Share your knowledge and experiences with friends, family, and neighbors to raise awareness about mortgage and title fraud. By educating others about the risks and preventive measures, you can help strengthen your community’s defenses against fraudsters.

Final Thoughts on Protecting Against Mortgage Fraud

Many Canadians are not even aware of the dangers of Title Fraud. Protecting your home or investment properties from title fraud requires diligence, awareness, and proactive measures.

By arming yourself with knowledge, embracing preventive measures, staying vigilant, and seeking legal advice when needed, you can reduce the risk of falling victim to title fraud and safeguard your most valuable asset. Remember, vigilance is key to protecting your home and investment properties and ensuring your peace of mind. If you need to connect with a real estate lawyer about your properties, please feel free to email me at  [email protected]

Get in Touch

If your are interested in investing in real estate, or looking to list your current home, I can help you form the appropriate strategy and answer any questions you may have. 

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