How organized crime has mortgaged or sold at least 30 GTA homes without owners’ knowledge
CBC Toronto has learned that a handful of organized crime groups are behind these real-estate frauds — in which at least 30 homes in the Greater Toronto Area (GTA) have either been sold or mortgaged without the real owners’ knowledge. Those revelations come from a private investigation firm working for a title insurance company to try and get to the bottom of the scams, which are costing insurers millions in claims.
And yet it has only recently been reported in the news.
The firm is currently investigating four title transfer frauds across the GTA where the ownership of a home was stolen using identity theft to cash in on the sale of the property. And at least another 26 mortgage frauds where mortgages have been registered on a home without the owner’s consent to obtain the cash value of the mortgage.
And how many is happening in other places? Vancouver? Montreal? New York? Los Angeles?
So how does this actually happen? … an organized crime group starts by looking through publicly available property records for a home without a mortgage — or a small one where there’s still a lot of equity left in the property — as a target.
So, are you saying we need to keep a LARGE Mortgage or be a permanent renter to prevent this fraud from happening?
From there, the groups who ultimately receive the fraudulent funds use stolen IDs and hire “stand-ins” to pose as tenants to gain access to the home, and other “stand-ins” impersonate homeowners to mortgage or sell it.
It sounds like they need “access” to the homes they target. So they can “show it”, or take pictures of the property to sell with “site unseen/unvisited by potential buyers”. The article is not clear on this point.
King’s firm tries to trace where the fraudulent mortgage or home sale funds go for clients, and says they’ve been successful in getting money back in some cases. But frequently title insurance companies don’t find out about the fraud until it’s too late.
Most cases, you don’t need to file a claim until AFTER the fraud happened.
In most of these cases, the real owner and the buyer are protected from most of the losses incurred through the fraud by having title insurance.
And the criminals? I have yet to hear of a conviction. Then again, I have not heard of this type of fraud until now.
But with title transfer and mortgage fraud claims skyrocketing, title insurer John Rider worries about the sustainability of providing this coverage in the long-term.
Then the industry (insurance, banking, mortgages, title offices, etc.) must do a better job, with better policies in place, to prevent, detect, and stop these types of fraud BEFORE it happens.
“There’s four title companies in the business in Canada and we estimate that industry wide, it’s easily $200 million, probably more, in fraud claims in the last two-and-a-half years.”
You can just image, in the US that has 10x the population, how much such fraud costs their industry wide.
… wants to see the government step up and lead the way on bolstering ID verification standards for professionals — so they don’t just rely on IDs — in these kinds of transactions.
“Otherwise [the government]’s going to find that they’re going to have a lot of consumers at their doorstep begging for help because they’ve lost title to their homes,”…
And with the cost of homes, and the low affordable homes, and the low rental available properties/high rent rates, the government on all levels MUST do better.
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