March is Fraud Prevention Month in Canada. No one wants to fall victim to fraud, and some of the best ways to prevent that from happening are through education and being proactive. For homeowners, this is a great time to learn about, or brush up on your knowledge of different real estate scams and how to avoid them.
Real Estate Fraud Affecting Homeowners
There are two types of real estate scams that can impact homeowners: foreclosure fraud and title fraud.
 Foreclosure Fraud Foreclosure fraud occurs when a homeowner is behind on their mortgage payments and at risk of losing their home. A fraudster will use this opportunity to offer the homeowner a loan or alternative funding in exchange for the title to their home. Once they possess the title, fraudsters can sell or refinance the home. |
 Title Fraud Title fraud is when a fraudster takes over the title or ownership of a home by means of identity theft. They will then sell the home and take the profit or apply for a new mortgage allowing them to access the equity in the home without the homeowners’ knowledge or consent. |
Title fraud cases made headlines in 2023 where at least 32 properties were involved in fraud cases, especially in Ontario and British Columbia.1 Increased housing prices may be one factor behind the increase in occurrences, with fraudsters looking at bigger profits from successful scams. Another factor some have credited for the upswing in title fraud is the rise of virtual real estate transactions and fewer face-to-face interactions, making it easier for scammers to impersonate real homeowners.
Who is at Risk of Title Fraud?
While title fraud has been getting more attention in the media lately, it’s statistically quite uncommon. Any homeowner may fall victim to title fraud, but certain factors may increase the likelihood of this type of fraud. For example, if a home is vacant for long periods while the homeowners travel, or if the property is mortgage-free and has a substantial amount of equity. Fraudsters can take advantage of these opportunities to commit title fraud.
Protect Your Property
Planning to be away from home for an extended period of time? Here are some tips to help keep your home protected:
- Have a trusted family member or friend check on your place and collect any mail or parcels
- Inform your financial institutions that you will be away and provide them with your contact information
- Install home security cameras you can access remotely to keep an eye on your home
Title Insurance and Other Ways Homeowners Can Protect Themselves from Title Fraud
Title fraud almost always begins with identity theft, so using the same techniques you would use to protect yourself against other forms of financial fraud and identity theft can help prevent title fraud as well.
Tips to prevent identity theft:
- Only share personal information such as your date of birth or social insurance number (SIN) with trusted sources
- Shred documents containing personal information before disposing of them
- Regularly check your bank and credit card statements for any irregular or suspicious activity
Another way homeowners can be proactive against title fraud is by having an active title insurance policy.
What is title insurance?
Title insurance is an insurance policy that protects residential or commercial property owners and lenders from costs associated with title discrepancies, fraud, or clerical errors on a property’s title.
Title insurance can be purchased through a lawyer or an insurance provider and is generally purchased when you buy your home or refinance, but it can be purchased at any time. Although title insurance won’t prevent title fraud, it does protect you in case you do find yourself in that situation, saving you time, and money and alleviating stress during what could be a challenging time.
Did you know?
The average cost of title insurance is a one-time payment of $800 to $1,200.2
How MCAP Fights Fraud and Supports Homeowners
Supporting and protecting our homeowners is a top priority. That’s why we follow strict federal guidelines for all applications and transactions to ensure we’re dealing with the right person for each deal. This includes actions like verifying and recording client identification, requesting proof of income and employment, and having fully completed, signed purchase and sale agreements whenever necessary.
Stay Informed, Stay Safe
Real estate fraud is a serious matter, but when armed with the right resources and knowledge, you can better protect yourself from becoming a victim. For useful information on how to prevent fraud and identity theft, visit the Canadian Anti-Fraud Centre website.
As always, MCAP is here to support homeowners at every step of their homeowner journey. Contact us if you have any questions about your mortgage, and we’ll be happy to assist! You can also check our Privacy page for more tips on how to keep your information safe.
1 Real-estate title fraud was one of 2023's most-read stories
2 In the latest real estate scam, homes are being sold behind owners’ backs. Here’s how.
