How to protect against mortgage fraud
Mar 4th, 2015 | By John Tracy
March is Fraud Prevention Month, and as such, our focus turns to this month-long education campaign aimed at addressing fraud within Canada. As one of the fastest growing crimes in North America, it is absolutely vital for all Canadian individuals and businesses to be able to recognize and prevent it.
What is mortgage fraud?
Mortgage fraud is a type of real estate fraud that most often hurts the institutions lending money to individuals purchasing property.
The most common type of mortgage fraud is when fraudsters acquire property and then artificially increase the property’s value through a series of sales and resales between themselves and an accomplice. A mortgage is then secured on the property based on the artificially inflated price.
Mortgage fraud can also occur when individuals falsify information used to qualify for loans beyond their financial reach.
Fast and easy money with huge consequences
According to the Canadian Association of Accredited Mortgage Professionals (CAAMP), the average case of real estate title fraud amounts to $300,000 and industry insiders estimate these scams are becoming increasingly common. For lenders, this type of fraud amounts to potentially huge losses resulting from unpaid mortgage and property foreclosures.
FCT pays out more as a result of fraud than any other claim type.
Protect yourself and your organization
In this digital age where face-to-face contact is minimal, it is more important than ever to be vigilant. Prevention is and always will be the best protection against fraud:
• Know your client
• Request a face-to-face meeting, whenever possible
• Ask for identification and verify its information
• Look for patterns of odd behaviour and trust your instincts
• Get title insurance
Title insurance — the ultimate protection
A title insurance policy from FCT allows you to:
• Protect your financial interests with some of the most comprehensive title insurance coverage available
• Safeguard yourself, your reputation, and your business by easily mitigating risk associated with claims
• Provide the best possible service to your clients by partnering with the leader in the title insurance industry
For more information, watch for real-life lender claims stories in an upcoming post.