FCT is your trusted partner in the fight against real estate fraud

Apr 14th, 2016 | By Renzo Farronato

Real estate fraud continues to be on the rise and unfortunately, commercial transactions are no exception. But with FCT in your corner, we can work together to stop fraud before it has a chance to create havoc and claim victims.

The experienced team at FCT employs various due diligence techniques to:

  • Spot suspicious activity (what we like to call “red flags”);
  • Report potential issues to all involved parties; and most importantly
  • Prevent fraudsters from scamming our partners out of their rightful investment.

In fact, it’s something our underwriting team does (and does very well!) on a daily basis, even during the height of the holiday rush . . . .

The naughty list

At the height of the holiday rush, FCT’s commercial division received a request for title insurance for a blanket mortgage in the amount of $2.6 million, spanning five vacant properties, all with titles free and clear (first red flag!). The transaction involved a private lender and a corporate owner.

As part of the request, FCT was provided a copy of the Corporate Profile and the Corporate Document List – everything looked okay.  However, after supporting identification for the borrower was received upon our request, our eagle-eyed underwriting team determined that one of the pieces of identification being used was invalid.

Feeling a bit uneasy about moving ahead with the file, FCT underwriting contacted the lender and the mortgage broker for more information. Years of experience and pure instinct told us that something was off. Our team then called the lawyer involved with a previous purchase of one of the lots — we were right! When compared, the two pieces of ID did not match and showed conflicting information.

For our underwriting team this was more than enough evidence to suspect fraud, especially with such a large deal. We declined to insure the deal and the lender pulled out as well. The real owner was contacted and their lawyer ultimately confirmed that the deal was a fraud.

What did we learn?

  • Bad things can happen to good people – secure your client’s investment with title insurance
  • Put FCT to work for your practice – it is always beneficial to have a second pair of highly skilled eyes on your file
  • Have confidence in our process – we’ve stopped $198 million in possible fraudulent transactions over the past 4 years and we know how to help protect you

Do you have any fraud stories you’d like to tell us about? Until next time, keep your eyes peeled and as Michael LeBlanc told us in his recent blog, trust your instincts.