There are three common types of real estate fraud, and each can result in the victim suffering severe consequences such as large financial losses and damage to a person’s credit:

1. Mortgage fraud
2. Title fraud
3. Foreclosure fraud

Mortgage fraud

Mortgage fraud typically occurs when a consumer provides false information or omits information to obtain mortgage financing that they would not otherwise be given if the information provided was true.

Mortgage fraud can also occur when a fraudster buys property, and then artificially increases the property’s value through a series of sales and re-sales between the fraudster and someone in cooperation with them. Then they secure a mortgage based on the false inflated value of the property. For more information, refer to 1552 Mortgage fraud.

Title fraud

Title fraud occurs when fraudsters claim to be the owner of a property, or using stolen personal information of the real owner, transfer ownership to themselves. After doing this, the fraudsters may sell your home or take out a mortgage on the property and flee with the money. Title fraud often happens in cases where there is no existing mortgage on a property because it is easier to get a first mortgage from a bank.

Many homebuyers purchase title insurance when purchasing a home. Title insurance acts as an insurance policy which will compensate the homeowner from losses from title fraud. For more information, view 398 Title insurance.

Both mortgage fraud and title fraud are commonly committed by people who first commit identity theft. Identity theft happens when someone uses your personal information without your knowledge or consent to commit a crime. For example, fraudsters can use stolen or fake identification or documents to obtain mortgage funds on property owned by others.

Foreclosure fraud

Foreclosure occurs when a homeowner has trouble making their mortgage payments, and the lender takes back the property to sell it and cover the loan.

Foreclosure fraud happens when fraudsters try to trick a person into transferring their property title to them in exchange for a loan to help pay their mortgage. The fraudster then possesses the title to the home while keeping the “loan” payments for themselves. They can then resell or refinance the property.

What to do if you’re a victim of real estate fraud

There are several things you should do if you believe you are a victim of real estate fraud. These include:

• Write down all the information regarding the fraud, such as when you noticed it, the actions you took, the names of the people involved and dates of communications;
• File a report with your local police;
• Report it to the Canadian Anti-Fraud Centre; and
• Contact:
  • your financial institutions and any other companies where you have accounts that may be affected
  • Canada’s two main credit bureaus: TransUnion and Equifax, and ask them to put a fraud alert on your credit report

Punishment for committing real estate fraud

Someone who commits real estate fraud may be found guilty under section 380 (1) of the Canadian Criminal Code.

The punishment ranges from a maximum of two years in prison if the total value of the fraud is under $5,000; to up-to 14 years in prison if the amount is over $5,000. In cases of fraud over 1 million dollars, there is a minimum sentence of two years.

Get help

If you discover you are a victim of fraud, it is a good idea to contact a fraud recovery expert for advice.

If you a have a criminal record due to fraud-related charges (or for any other criminal offence), and wish to erase your record, call toll-free 1-888-808-3628 or learn more at Pardon Partners. It’s easier than you think.

								
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