Hasn’t the government fixed the land title fraud problem?

Feb 26th, 2015 | By John Tracy

During speaking engagements, I often raise the issue of title fraud. When I discuss the possibility that a fraudster could sell your home to an innocent third party and abscond with the proceeds, I usually get the following comment:

“I know this was a big problem a number of years ago but hasn’t it been cleared up?”

My response: “Yes, there were some legal changes made by governments, but title fraud and real estate fraud are still a real and present danger for any homeowner today.”

Here is the source of the confusion:

Previously under old Land Title Act laws, if a fraudster sold your house to an innocent third party the innocent third party got to keep your house.

Now under new Land Title Act laws, you get to keep your house, but you still have to prove that you were the victim of fraud and that you “didn’t do it!”

So don’t be lulled into thinking that the possibility of land title fraud no longer exists. That is what the fraudsters want you to think. In fact, there is no surefire prevention for title or mortgage fraud — as there is no surefire prevention strategy for any form of fraud. The reality is that we can take steps to reduce our risk and ensure we are protected from the negative legal and financial impacts of real estate fraud through insurance products like FCT’s Title Fraud Protection+.

Recovering your title is a legal process and generally costs between $10-15,000. Title insurance is a one-time premium with no deductibles  that stays in place for as long as you own your home. Title insurance premiums start at $350 and are based on the value of your home.

Make an informed decision about title insurance for your home as part of your long-term financial plan. Visit www.RetireYourHome.ca  for more information.

2 Responses to “Hasn’t the government fixed the land title fraud problem?”

  1. Barry Boyd says:

    John – Thanks for the clarity between the old Land Title Act and the new one. However, even under the new Land Title Act, the benefit of title insurance is still “reactive” – ie: while extremely valuable, and no home owner should be without title insurance, it comes into play after an event has occurred, and in this particular case, let’s assume that it’s an identity theft mortgage fraud application. A proactive approach, through a credit bureau monitoring product, would give the “real” home owner a notification alert when the initial credit bureau inquiry was made – hopefully, days before an ownership transaction is completed and thereby thwarting the theft and protecting the “real” home owner from the quagmire of identity restoration that would inevitably follow.
    Great Post.
    Barry is a Director at idAlerts Canada Inc. and a recognized “Privacy by Design Ambassador” by The Information & Privacy Commissioner of Ontario.

  2. admin_blog says:

    Thank you for the comment Barry. I agree with your comments. Title Insurance really only comes into play once a loss has occurred and therefore I agree with your characterization of it being “reactive”. FCT sees public awareness about title fraud and the prevention of title fraud as an important part of its mandate but at the end of the day, the title insurance policy is there to protect someone who finds him or herself in the unfortunate position of being a victim of fraud.

    I agree with you that a credit bureau monitoring product would assist in providing notification when an initial credit bureau inquiry is made. It is our experience however that in many instances, there is no credit bureau inquiry made in connection with many fraudulent transactions.

    What we do know is that there is no 100% prevention against real estate fraud.

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