Video: Fighting Fraud with the Experts

Mar 10th, 2022 | By FCT

How can you tell the difference between a good deal and one too good to be true? Fraudsters’ tricks and tech are constantly changing, and they’re counting on us to stay still. In this FCT Speaker Series webinar, three industry experts sit down to discuss some of the most prevalent types of fraud affecting the real estate industry.

 

Marie Taylor

Marie Taylor is the director of national underwriting at FCT, and a Certified Fraud Examiner. She has helped pioneer fraud prevention in the title insurance space over the last 20 years, and is a crucial line of defense for FCT’s clients. In this video, Marie talks about wire fraud, power of attorney fraud, identity theft and title fraud.

What is wire fraud?

Wire fraud is when someone tricks a person or company into sending them money under false pretenses. This type of fraud covers a broad range of scams, but they often boil down to confidence schemes. Once the scammer secures a transfer of funds, they usually break off contact and disappear.

What is power of attorney fraud?

Power of attorney fraud happens when a fraudster forges a power of attorney document to appoint themselves as attorney and commits fraud. It also applies when a legitimate attorney abuses their power in order to financially enrich themselves. This can take a number of forms, because an attorney has such broad access to the donor’s finances

What is title fraud?

Title fraud is when someone impersonates a homeowner to take out a mortgage or sell the property. The fraudster then disappears with the money. In many cases the homeowner doesn’t even realize their title has been stolen or a mortgage has been fraudulently registered until the lender contacts them about missed payments.

Title fraud now most often occurs on high-value properties with an existing mortgage. Instead of targeting free and clear properties, fraudsters are choosing to take out second mortgages on those homes, so they’re targeting properties that offer the highest yield.

Ed Karthaus

Ed Karthaus, Executive Vice President, Residential Lending, Credit Cards & Marketing at the Home Trust Company, is an Accredited Mortgage Professional and has served as a director of the Independent Mortgage Brokers Association of Ontario. In this video, he talks about mortgage application and value fraud.

What is mortgage application fraud?

Mortgage application fraud (also called “fraud for shelter”) is when someone applying for a mortgage manipulates their financial documents to create an inflated impression of their income or assets. This is usually so they can qualify for a larger loan than they would otherwise qualify for.

What is value fraud?

Value fraud is when a homeowner manipulates the value of their home in order to increase their loan qualification amount. One common way this scheme works is for a fraudster to buy a property at market value, then quickly resell it, often to an accomplice, at an inflated price. That price is used as the basis for a larger loan, which the fraudster vanishes with, leaving the lender with a property worth less than its mortgage.

Karissa Lipana

Karissa Lipana is a senior policy analyst at the Ministry of Government and Consumer Services. She works to promote consumer rights, educating vulnerable populations on the different unfair or unconscionable practices that can target them. In this video, she speaks to the issues of contractor and home renovation fraud.

What is contractor fraud?

Contractor fraud refers to a variety of malpractices that some contractors and other construction companies engage in. From a consumer protection standpoint, it often takes the form of misleading quotes that result in homeowners paying far more than they thought they’d agreed to. But it also covers other aggressive or unethical practices, like denying contract cancellations, even when made within the legal 10 days of signing (in Ontario).

What is home renovation fraud?

Home renovation scams are when someone pretends to be a contractor in order to secure money from a homeowner. The fake contractor may advertise low prices or a fast work schedule, often with high pressure for up-front payment. Once initial payment is made, the scammer disappears.

 

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