Mortgage fraud has become one of the most common scams, with more than eight million Canadians now owning their own home. It is the Canadian dream to own your own home, your land. It is a symbol of financial security, our safety blanket and the con men like the possibilities.

How big is mortgage fraud in the dollar bracket? I don’t think anyone knows and we have only a handful of police involved across the country. There is not a central registry in this country. This is certainly a crime the financial people don’t like discussing.

While it is on the rise across the country, Alberta holds the distinction of being the mortgage fraud capital of Canada. In one year alone there were 2,700 cases.

The ultimate victim in mortgage fraud is the moneylender and that has the police running into brick walls time and time again.

When I started to work on this story there was not much cooperation. Everyone wants you to talk to someone else. The Canadian banks are downplaying the problems, but they are there and it is happening. The courts are not acting very aggressively when it come to jail time for these scammers. Judges have to see that these are huge losses for these homeowners and of course like every other crime in this country the elderly are the ones most likely involved.

Mario Toneguzzi of the CanWest News Service writes about mortgage fraud becoming over a billion dollar a year industry in Canada.

Mortgage fraud occurs in two ways.

The first, involves individuals fabricating their qualifications for a mortgage when buying a house.

The second involves fraud for profit where someone intentionally defrauds a lender or a homeowner of his or her interest in a property.

The latter is often accomplished by identity theft. Ownership of a property is transferred fraudulently from the rightful owner to the criminal who then sells or mortgages that interest and makes off with the funds. The problem is becoming more prevalent as technology makes it easier to falsify documents and create identities, say experts in the field.

Norman Gettel, the gentleman who discovered he didn’t own his own home anymore in Richmond B.C. found out when he checked with the B.C. Assessment because his assessment didn’t arrive. They informed him he didn’t own his home anymore. So far the bank CIBC, has backed off and don’t plan any foreclosure. Gettel has spent $10,000 for legal advice. His problems are not over by any means.

I know what you are asking, “What does a homeowner do?” This protection is needed for owners of older homes as well as new.

Three years ago I talked to Regional Director Wayne Proctor of First Canadian Title, the company writes insurance protection on this situation.
I was able this time to contact Charles McKee Commercial Consultant for First Canadian Title.

Explain to my readers just what First Canadian Title is all about?

“We provide title insurance for both residential and commercial transactions and have been doing business in Canada for eighteen years and have had offices in B.C. for twelve years. The company provides title insurance for both lenders and owners and we sell just about seven thousand policies a month in British Columbia.”

Just what does Title Insurance mean to me as a homeowner?

“Title insurance provides a lot more than just insurance on titles and we have a very good title system in the province. There is no question about it, it is one of the best in the world. I personally think it is best the in North America but it is not perfect. We provide supplements to the government run system. Our insurance is like extended health care insurance for the health care system. We provide protection to people for things that the government system does not protect. A lot of those are what we would call off-title protection. If somebody buys a house and there is a problem with the back deck, the vendor never got a permit for it, the municipality comes along and says you have to take it out and it has to be rebuilt. First Title would cover that. If there is a problem with an encroachment we pay for that sort of thing. The real protection that people are concerned about right now is fraud. We provide a sort of complete protection with respect to top fraud. Under the land titles system if somebody files a fraudulent mortgage against your house you have to go to court and you have to prove that it was fraudulent, and then you have to go to court again and prove that you can‘t collect the money from the scammer before the mortgage can be taken off. That is not an inexpensive business. With title insurance all you do is inform the company and they take on the problem. We have a duty to defend the title at our expense, conduct the court action, pay for the lawyers and we would get it off the title. If we couldn’t get it off the title we would pay it out. If somebody steals your title, like the Gettel’s case where nothing has happened yet in the courts, if he would have had First Title he would have phoned us and we would be looking after the situation. What happened in another case that just came down about three weeks ago, it is called Bucholz and in that case there was a fraudulent transfer of the title into the name of the crook. The crook put a mortgage on and then a second mortgage. The court held that the title went back to the owner but subject to the two mortgages. The court has held the two mortgages are valid and the owner has to go to court against the land title insurance fund and this could take years.”

This is not just for new homeowners is it?

“No anybody that has title to a property can buy an existing home owners policy and the simplest way to do it is through BCAA or through your branch of Envision credit union. BCAA recognized the benefit for their members. You can do it directly through our web site it is really simpler to go to BCAA or Envision. We are in process of expanding that network. It is a one-time premium and that starts at $350. It is not an expensive product.”

This is really the only protection in this field that people can buy?

“That is correct.”

Here is the question. Would you exaggerate your income level or the size of your down payment when you are trying to secure a mortgage? The investigators of these things tell us that fifteen percent of Canadian home buyers do that all the time. The law calls it mortgage fraud. Hardly major scammers here and we will maybe never know about this being exposed until something goes wrong – the mortgage payment can’t be paid. These frauds don’t make the headlines.

The Financial Institutions Commission are the investigation division of the B.C. Ministry of Finance and Corporate Relations. They estimate that fifteen per cent of all B.C. mortgage applications contain untruthful information. As a home buyer it is best to play the game by the rules and agree to a mortgage you can afford.

Mortgage fraud is becoming more common across Canada and is now estimated to be $50 million a year.

There is another way to protect yourself and that is by getting a duplicate of the title and you can do that under the title act. You need a notary, lawyer or real estate agent to obtain a duplicate. The cost is $50 plus service charges. Then if anything fraudulent is about to take place nothing can happen until the duplicate is presented. Do some checking, protect yourself and don’t say “Oh that won’t happen to me” Mr. Gettel thought the same thing and did nothing about it. This is now a protect yourself world.