Real estate fraud is a general term used to describe the different types of fraud that the real estate industry faces.
How can I save myself from mortgage fraud?
- Protect your property by protecting your identity
No system can fully protect against the risk of fraud. Homeowners play a crucial role in protecting their property by guarding against identity thieves. We know that fraudsters pretend to be owners by obtaining a false identity document and that they then transfer a property that does not belong to them.
To avoid this situation:
- Always keep your personal information, such as your birth certificate, social insurance card, bank account numbers, and credit card details in a safe place to which only you have access.
- Never put your birth certificate or social insurance card in your wallet.
- Shred documents, like credit card statements, before disposing of them.
- Never reply to spam or emails that ask you to provide your banking information, credit card details, passwords, or other sensitive information about a property you own.
- Check potential tenant references if you rent your property and be sure to regularly check the condition of the property you are renting.
- Be on the lookout for identity theft
To quickly highlight fraud attempts, pay attention to the following situations:
- Tax slips or bills sent to someone other than you are sent to your home unexpectedly.
- You get a phone call from someone seeking information about a mortgage that has already been negotiated for your property.
- Your bills are not coming to you as expected.
- Creditors contact you about purchases you have not made.
- There are anomalies in your bank statements or credit card statements.
- Power of attorney
Another way to protect yourself is to be careful when drawing power of attorney. Before giving another person a power of attorney to take care of your personal property, you should consult with your lawyers or advisors in order to implement appropriate restrictions.
- Title insurance
Consumers can also discuss it with their lawyers and advisors about other methods of protection, including the benefits of buying title insurance.
When banks are victims of mortgage fraud, to whom do they turn to recover these funds?
In the case of a mortgage default, the property that guarantees the loan is resold by the lender, and this measure is sometimes sufficient to cover any loss arising from mortgage fraud.
If, after the sale of the property, there is a deficit, the lender may ask the insurers of the mortgage or title to repay the losses. There are also various professional liability insurance funds created by groups such as law societies and real estate associations to reimburse losses to their victims of crime. The bank may also sue the criminals themselves to recover the losses, in whole or in part.