Mortgage Fraud - Can Someone Steal Your Home

Everybody knows that someone can steal a car, a wallet or a credit card, but how do you steal a home, a thousand ton gorilla fixed to the ground. Can it really be done!

You own a home if you are the registered owner of the property at the land title office of your local jurisdiction. If your name is replaced by somebody else name at the land title office, you are no longer the owner. You have just lost your home.

How can that happen?

When you purchase a property, the lawyer will do a couple of checks, such as the identity of the current owner, that the property is free of all liens and encumbrances, that the property has a clean title.

The seller will sign some papers that effectively allow the lawyer to arrange the transfer of the property to the new owner. The land title office will register the name of the new owner in their records and the previous owner no longer owns the house.

Now if someone can produce some fake identification purporting to be the owner of a property. Obviously the fraudster would have done considerable research on the person he/she is trying to defraud, such as finding information about the victim's full and complete name, date of birth, social security number, credit card number, driver license number, current address, racial background and even physical resemblance. An unsuspecting lawyer doing the paper work for the transfer of property may believe that the fraud perpetrator is the genuine owner. The lawyer thus completes the sale. The fraudster receives the full proceeds of the transaction while the victim looses the house.

Another way to defraud a property owner is to mortgage the property that you do not own. Typically the fraudster who has acquired fake identification and done his/her homework, will approach a bank for a mortgage. The bank will check the identity of the applicant, his/her credit history, his/her income etc. The bank will also arrange appraisal or inspection of the property. But the bank may not know that it was presented with false identification and was dealing with someone who is trying to commit a mortgage fraud.

Once the mortgage is approved, the bank will instruct a lawyer to arrange for the execution of the mortgage documentation and registration of the mortgage with the land title office. Money is advanced to the applicant and the victim has a mortgage registered against his/her property for which he/she never received a dime.

In both scenarios the fraud is easier to commit if it involves a rental property and the fraudster is living in it. This is because when an appraisal report or inspection report is requested by the purchaser or bank, the perpetrator may arrange for the appraiser or inspector to check the property without the knowledge of the real owner and without raising any suspicion.

The fraud may not come to light for many months. By that time the fraud perpetrator has completely disappeared from the scene. The real owner either has lost title to his/her house or has a huge mortgage on the property.

Possible remedy for the victim is to sue the real estate agent if one was involved, the lawyer and the bank. Whether the victim wins the case will be a matter of individual circumstances. The fraud will also be reported to the police.

Lesson to be learned: identity theft is real and kicking. Take all the precaution you can to keep your personal data as private as possible to prevent people from stealing your identity and making you a victim of fraud.

The author has been in the banking financial industry for over 30 years and is now retired. For information and tips on mortgages please visit his website: http://www.mortgagetoronto.info

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