As home prices spike across Canada the instances of mortgage fraud are on the rise. So what do you need to do to protect your home? Mortgage fraud starts with someone stealing your identity, then identifying themselves as you. There are a number of different ways that identity thieves can take over your identity.
Dumpster diving: Simply by sorting through your trash to find confidential documents.
Mail box theft: Stealing confidential information from your doorstep.
Phishing: Posing as a legitimate website with the intent of defrauding you.
Computer hacking: Breaking into your computer to obtain the needed information.
Skimming: Using a data storage device to capture your information when using an ATM or making a merchant debit or credit card transaction.
Using internet web sites: Looking for personal information that you share.
Stealing your wallet or purse: The old fashioned way to get all your data.
There are several different types of mortgage fraud including title fraud or foreclosure fraud.
Title fraud: This occurs when someone steals your identity to sell your home or set up a new mortgage. In most cases, you, the homeowner is the one left responsible. One example would be for the criminal to fraudulently discharge your existing mortgage, transfer the title to themselves, sell your home and keep the profits. Another would be to use fake identification pretending to be you to take out a new mortgage and pocket the profits. If your home has a free and clear title it is a much simpler process. In either case, once the money for the sale or new mortgage is advanced, the criminal disappears with the funds and you are stuck with the loan. Often you will not be aware that the fraud has taken place until well after it’s been committed. You might find out when the bank contacts you about non-payment of the monthly mortgage, or when someone pulls up with a moving truck to your house believing they are the new owner.
Foreclosure fraud: Foreclosure is the process where a mortgage lender takes possession of your home and sells it to cover the mortgage debt that you have incurred, but are unable to pay. In a situation where foreclosure is imminent, a criminal may take advantage of your situation and offer you a homeowner a loan to either cover the expenses or to consolidate loans. This will be in exchange for up-front fees and an agreement to transfer the property title to the criminal. Afterwards, the criminal can either sell your home or remortgage it, leave with the money, and leave you to lose your home and also be stuck with the debt.
For those of you out there, especially seniors who have a free and clear title, you need to protect yourselves from this type of fraud. There are a couple of options. You could buy title fraud insurance, or there are different ways to put a lien on your property so that your bank will notify you if someone tries to take out a line of credit or new mortgage. For more information stop in to see your financial advisor to discuss how to protect yourself against mortgage fraud.
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