OAKVILLE, ONTARIO, February 28, 2014 – FCT, Canada’s leading provider of title insurance continues to provide alerts to public about trends in suspicious real estate transactions flagged as potential fraud. In 2013, FCT underwriters noticed a more pronounced trend towards a greater number of suspicious transactions at a lower dollar value.
In comparison to past years, for both residential and commercial real estate transactions, the amount of mortgage funding sought in transactions flagged as suspicious is getting smaller, at the same time the incidences are more frequent. For instance in 2008, the amount of mortgage funding sought in a flagged residential transaction was $600,000 on average. By 2013 the average has dropped to $360,000 – a 40% drop in mortgage money.
“In 2009 we were flagging suspicious residential frauds about once a week. That average has increased to almost twice a week five years later. The value of these transactions is dropping as well. I think fraudsters may be trying to slip smaller transactions by us as they may believe that a higher value mortgage may be subject to greater scrutiny,” stated Eric Haslett, Vice President & Chief Underwriter at FCT.
2012 marked the first year that FCT began reporting its incidents of suspected commercial frauds in an effort to alert owners, lenders and their legal advisors about the growing incidents of commercial fraud. Similar to its experience in the 2013 residential market, there were more incidents of suspected commercial fraud but at a lower value. The average for a potential loss to a commercial lender was $3.5 million in 2012, one year later it has dropped to just over a $1 million potential loss.
“While transactions where real estate fraud is suspected by our underwriters still constitutes less than one percent of our overall business, we want buyers, lenders and their legal counsel to know that when it comes to their deals we are just as vigilant on every transaction no matter the price point or mortgage value. We constantly monitor trends and update our underwriting processes with a view to protect their interests,” stated Mr. Haslett.
As part of Fraud Prevention Month, (FPM) FCT annually shares its experience in combating real estate fraud in order to inform homeowners, lenders and their legal advisers on how to protect themselves from becoming victims of real estate fraud. As part of FPM, The FCT Blog http://www.fct.ca/blog/ will be featuring a month of posts about real estate fraud including two guest blogs profiling recent attempts at real estate fraud:
March 4, 2014- Mayor Fred Weekley, District of Katepwa Beach, Saskatchewan- Title Fraud- My Experience
March 11, 2014- Tony Spagnuolo, B.A., J.D. – My Too Good to Be True Deal #2G2BT (2Good2BTrue)
For more information, see FCT’s tip sheet on title fraud protection: http://bit.ly/1bogMMO.
Founded in 1991, the FCT group of companies is based in Oakville, Ontario, and has over 800 employees across the country. The group provides industry-leading title insurance, default solutions and other real-estate-related products and services to approximately 1,250 lenders, 43,000 legal professionals and 5,000 recovery professionals, as well as real estate agents, mortgage brokers and builders, nationwide.
For more information on FCT, please visit the company website at www.fct.ca.
FCT has been recognized by Achievers as one of the 50 most engaged workplaces in Canada since 2012. In 2014, FCT celebrates its 20th anniversary of proudly serving the lending community.
†The FCT group of companies includes FCT Insurance Company Ltd. which provides title and valuation insurance, with the exception of commercial title policies, which are provided by the Canadian branch of First American Title Insurance Company. Services are provided by First Canadian Title Company Limited.
###
Media contact:
Wendy Rinella
Corporate Affairs
FCT
905 287-3379
wrinella@firstcdn.com