Owners beware

Experts warn Alberta a hot spot for land-title fraud

Calgary homeowners are being warned to protect themselves from land title fraudsters who are targeting active real estate markets across the country.

"Ontario, B.C. and Alberta are the hot spots for fraud in Canada," said Marie Taylor, director and national underwriter for title insurance company First Canadian Title.

Land title fraud, also known as fraud for title, happens when a person's identity is stolen and used to create fake documents and identification – which are, in turn, used to take out a mortgage loan on the victim's home.

When the bank approves the mortgage application, the fraudster will take the money and run, leaving the victim with another large debt on his or her home.

Victims of land title fraud often don't realize there's a problem until they start receiving overdue payment letters months later.

Taylor says a national database for this type of fraud does not exist in Canada, so the number of cases each year is unavailable. First Canadian Title, however, estimates damages from real-estate fraud in Canada range up to $1.5 billion annually.

The results of land title fraud can be disastrous, says Taylor.

"Not only is there the emotional stress of knowing you've been victimized by fraud, but it can take considerable time, money and effort to deal with all of the complications that can arise," said Taylor.

"That can include costs of defending or denying ownership in a mortgage property, often in a court of law; lost opportunities to sell or buy another property or the possibility of losing your home."

Though no one is immune to land title fraud, homeowners who have paid off their mortgages are most at risk, says James Porter, a professional conduct review officer at the Real Estate Council of Alberta

"These homes are targets since a lender may be willing to lend a large amount of money on these properties," he said.

"Seniors may be more likely to fall into this category as they tend to own homes with a lot of equity."

Porter adds snowbirds and others who are out of town for long periods of time are also more susceptible to land title fraud since they may be less likely to monitor their properties.

"Vulnerable individuals, such as seniors and new Canadians, may be at risk in not understanding how to protect their personal information and may be easier targets for identity theft," said Porter.

Mortgage brokers and lenders do have ways of red-flagging fraudulent applications. For example, homeowners who've had their mortgage paid off for several years are less likely to take out another large mortgage on the same property. As well, lenders will become concerned if the borrower is unable or unwilling to set up a viewing of the property.

"Typically, the fraudster just has identification to match the title, but does not have access to the home," said Porter.

Homeowners are also encouraged to be vigilant in keeping their personal information safe to prevent any kind of fraud in the first place. Porter suggests homeowners get title insurance as extra protection, as well as regularly review their home's title registration and check for irregularities through the local Alberta Land Titles office.

If homeowners have fallen victim to land title fraud, they are encouraged to contact the police immediately and seek legal counsel. Albertans can also call the Consumer Contact Centre at 1-877-427-4088.

Albertans do have recourse against land title fraud through the provincial government's Land Titles Assurance Fund, which protects and compensates property owners who have fallen victim to fraud.

For more information, visit www.servicealberta.gov.ab.ca.

Tagged: Calgary Real Estate News | Homeowners | Land Titles | Mortgage | real estate council of Alberta