Are you aware that incidences of real estate fraud are on the rise? Yes, instances wherein someone steals ownership of a home have happened and fraudsters do this with the help of identity theft so that they can benefit from the value of the stolen home. In this article the Toronto private investigation experts at Haywood Hunt & Associates Inc. outline some simple ways to protect yourself from this emerging threat.
How Does Real Estate Fraud and Title Fraud Happen?
Scam artists steal the identity of homeowners to convince real estate agents to list the home without the real owner’s permission or knowledge. What happens next is that the home or property is sold without the owner’s consent. This can be made possible by the fraudster using a fake identity or using forged documents to access the title that shows the legal ownership of the property. Once the fraudster has the title of the property, then they can sell it or remortgage it to benefit financially. Oftentimes the homeowners do not have any idea of what’s happening until they get legal documents informing them about missed payments or informing them that the home has been sold. This is a nightmare because it takes a significant amount of effort, money, and time to restore your title or to remove or clear fraudulently registered mortgages.
People who are victims of title fraud lose the ability to leverage the mortgage of their property. This means that they also will not be able to sell their property until their rights have been re-established by legal means. Most victims of real estate fraud or title fraud are seniors or people who rent out their homes to tenants. It is easy for a scammer or a scam artist to pretend to be homeowners of a rented property if they have access to the details of the real owners.
Protect Your Identity
Identity fraud is oftentimes the first step to real estate fraud and title fraud. With this said, it makes sense to protect one’s identity to prevent identity theft in the first place. If you’re a homeowner, you’ll need to make sure that all your personal data is protected and not public knowledge. Information that is on your citizenship card, social insurance card or IDs, birth certificate, driver’s license, passports, and other documents that contain your full name should be kept out of the public eye.
Obtain Title Insurance
The Financial Services Regulatory Authority of Ontario defines title insurance as an insurance policy that guards property owners and their lenders against damages relating to the title or ownership of the property, including from title fraud (FSRAO). Title insurance won’t deter real estate fraud but will make the consequences more bearable should it happen to you. This type of insurance protects both scammed buyers and homeowners.
Be Wary of Who You Rent To
If you own a property and renting it out, be wary of the people who pose as tenants in order to get your information. Some may go as far as rent the property from you because it makes them more credible when they pose as owners. Be sure to perform adequate background checks and credit score screening. It won’t hurt to cross-check references and hire a private investigator to verify their information to be on the safe side.