Real estate fraud continues to be a concern to Canadians and industry professionals. While the industry and the government continue to work diligently enhancing mortgage fraud prevention across Canada, it is important for real estate professionals to be able to identify and flag risks to mitigate fraud.
In recognition of Fraud Prevention Month in March, Teranet hosted the first Market Insight Forum of 2022, to discuss fraud affecting real estate, mortgage, lending and legal professionals and flags to look for to avoid potential fraud. Panelists were able to discuss the flags associated with fraud and 3 easy ways you can prevent it from happening.
Know the signs
Being familiar with the signs of fraud is crucial in preventing it from happening. Common red flags, such as trying to skip steps, rushing through the process, and incorrectly completing mortgage applications are all possible signs of fraudulent activity. As a real estate professional, it is important to do your due diligence and understand the process and protocols when it comes to applying for a mortgage – this will help you identify possible red flags and mitigate risk for you and your client. One of the quickest ways to identify potentially fraudulent activity is using GeoWarehouse to verify the ownership information and sales history information. You can invest in a parcel register* which contains the subject property’s description and list of instruments registered against the property, so you have the property intelligence information at your fingertips.
Go with your gut
As a real estate professional, your knowledge and experience paired with tools like GeoWarehouse can be used to prevent fraud. If something doesn’t look right or you are unsure, it could be a possible sign of fraudulent activity. Ensuring that you are following the necessary protocols and aiding your clients along the way can help ensure an honest and adequate transaction. Use your intuition and back it up by the facts!
Educate your clients
As important as it is for a real estate professional to be informed and educated in fraud, it is also important for their clients to be taking the necessary precautions and educating clients can help prevent fraudulent activity when applying for a mortgage. In the Insight Market Forum, Panelist Tannis Waugh, Barrister & Solicitor at Waugh and Co Professional Corp, identified that many Canadians don’t know that misrepresenting the use of the property is considered mortgage fraud. Keeping your clients informed will help protect your business, as well as their best interests.
Want to learn more about how to identify and prevent real estate fraud? Read our complete re-cap of the Market Insight Forum here.
*An official product of the Ontario government pursuant to provincial land registration statutes.