According to the Financial Consumer Agency of Canada, real estate fraud has become an emerging concern for Canadian homeowners, especially since the start of the pandemic. With real estate fraud stories being top of mind in the media, it is important to know how you, the real estate professional, can complete your due diligence to recognize the signs of fraud and arm yourself with the proper tools and data to protect yourself and your clients from financial loss.
What is real estate fraud?
There are different forms of real estate fraud, but the most common types are title fraud and foreclosure/mortgage fraud. Regardless of the type, it typically starts with identity theft.
Title fraud can occur when a person(s) indicate they own a property but may not be the only parties on the official title record, the Parcel Register*, or be listed on title at all.
Foreclosure/Mortgage Fraud can occur when a person(s) tries to obtain a mortgage from a lender with fraudulent information. Mortgage fraud is quite common and can occur if the Lendee has included falsified information on their mortgage application.
To help protect you and your clients from real estate fraud, GeoWarehouse provides industry professionals and select organizations with the most authoritative and complete property and land information in Ontario to conduct due diligence practices in facilitating a real estate transaction. GeoWarehouse is accessible to industry professionals through a subscription-based model that is available to approved industry professionals in accordance with government regulations and qualification criteria.
Available in GeoWarehouse, a Parcel Register*, is a report that will provide you the information needed to mitigate fraud.
How a Parcel Register can help you complete your due diligence
A Parcel Register is instrumental in completing your due diligence. As an official product of the Ontario Government, this electronic report provides a property’s legal description, the PIN (Property Identification Number) and the registered owner(s) of the property. It details the history of ownership, along with the registration and discharges of any mortgages, liens or other types of encumbrances that have occurred since the property was brought into the automated land registration system.
This report also provides insight into the legal homeowners and reveals legal names of those on the title document. This information provides you insight into dates, parties involved, amounts of transfers, undischarged mortgages, liens and encumbrances on a property. Additionally, using a Parcel Register will help you assess how heavily encumbered the homeowner is with respect to mortgages and liens and how that equity position may affect their ability to finance your commissions.
With a Parcel Register, you can identify who is legally listed on the Title document to ensure that you are working with the correct individuals and the background information, including purchase history and history of ownership, you need to further verify their identity.
Protecting yourself and your clients from real estate fraud
In March 2022, Teranet hosted the Market Insight Forum, to discuss fraud affecting real estate, mortgage, lending and legal professionals and flags to look for to avoid potential fraud. Industry professionals, such as Stefani Konidis, Broker, Paul Taylor, President and CEO at Mortgage Professionals Canada and Tannis Waugh, Barrister & Solicitor at Waugh and Co Professional Corporation shared their expertise in how to reduce risk. They were able to identify the red flags associated with fraud and 3 easy ways you can prevent it from happening.
- Know the signs
- Go with your gut
- Educate your clients
In addition to these key ways to identify fraud, it is always important to encourage your clients to purchase title insurance.
In addition to GeoWarehouse, Teranet arms Mortgage professionals with the PurView solution to mitigate risk, by offering a fraud check option, which flags common indicators of fraud and will alert them to any aspects of a property or its history which may require further due diligence to ensure fraud is not present.
Available in GeoWarehouse, a Parcel Register*, is a report that will provide you the information needed to mitigate fraud.
Learn more about these easy ways to prevent fraud from happening, click here.
Understanding the signs of fraud and how you can leverage GeoWarehouse and Parcel Register to complete your due diligence can help you avoid fraud and protect your clients. Visit the GeoWarehouse Store today to learn more about Parcel Register.
*An official product of the Ontario government pursuant to provincial land registration statutes.