Consumer Tips
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Welcome to Your House Matters, I'm John Charbonneau with TMG The Mortgage Group. Every day, Canadians take the necessary steps to protect their homes from common perils such as fire and weather related damage. Unfortunately our homes are becoming vulnerable to the emerging crime of real estate fraud. In 2012 it was estimated that real estate fraud approached the $400 million mark in Canada, and all estimates show this growing by leaps and bounds, especially in larger cities where home values have increased substantially over recent years.
There are two types of real estate fraud, the first being fraud for shelter where home buyers does not qualify for a mortgage, in these cases borrowers are motivated to make false statements on the application and provide falsified documents. The second type is fraud for profit. This second type of fraud is relatively easy to commit when you are the bad guy, and even easier to prevent if you are the good guy and have the right information. Fraudsters will pose as a legitimate home owner, they either arrange a mortgage on your home or sell it out from under you and disappear with the money. The legitimate home owner is in for a nasty shock when the lender contacts them to collect on a falsified mortgage. In most cases of fraud for profit the victimized home owner ends up paying thousands of dollars in legal and court costs in an attempt to either get title to their home back or nullify the false mortgage. In cased of mortgage fraud, it is as if you are guilty until you can prove yourself innocent and not all home owners are successful.
There are a number of ways to protect and reduce the likelihood of becoming a victim. As mortgage fraud first starts with the criminal taking on your identity you need to reduce the possibility that your identity can be stolen in the first place. The best way to protect yourself is to buy title insurance. The cost of the premium is usually less expensive than a years worth of fire insurance and the premium only has to be paid once and is good for as long as you own the home and can even be transferred to your heirs. Having title insurance won't prevent real estate fraud but you are protected in many ways including the policy picking up all the legal and court costs to defend your innocence and compensate you for any loss. That's all for this edition of Your House Matters, thanks for watching.
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