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How To Protect Yourself Against Mortgage Fraud

Fraud Prevention Month has wrapped up in Alberta and this year, there was definitely a heightened focus on mortgage fraud.

Unfortunately, mortgage fraud has been on the rise with Equifax reporting a 52% increase since 2013 in Ontario alone. Many of the news articles that have come out about this type of fraud have been centred around that region, but that doesn’t mean it can’t happen throughout the rest of Canada.

So even though the month is wrapped up, it’s always a good time to take proactive steps to avoid getting scammed. Here are some quick tips to help you prevent fraud.

Get a Title Insurance Policy

Simply put, title insurance protects you from any losses due to a defect in your property's title. This can give you peace of mind by ensuring that the title is legally sound, shielding you against any legal or financial losses arising from issues with this document.

Because your home is likely your largest investment, title insurance is a no-brainer. Plus, it’s typically only a one-time premium. Here’s what it usually covers:

  • Incorrect completion of paperwork,

  • Errors in registering or cataloging legal papers,

  • Forgeries and fraud,

  • Unidentified or absent beneficiaries,

  • Unpaid taxes and assessments,

  • Unpaid judgments and liens,

  • Mortgages not yet made public,

  • Mental incompetence of grantors on the deed,

  • Impersonation of the actual owners of the land by fraudulent persons,

  • A potential buyer declining to take ownership due to an issue with the title.

Check Your Credit Score Regularly

Regularly checking your credit report will not only prevent mortgage fraud, but all types of fraud!

If you spot a credit account you didn’t apply for, an unfamiliar address, or activity on credit cards you haven’t used lately, you can use this information to get ahead of the scam.

It’s like getting a regular medical check-up – spotting a problem early on can prevent it from worsening.

Sign Up For Bank Notices and Monthly Statements

While monthly statements are the norm for almost every bank, many banks also provide fraud alerts if they detect unusual activity in your accounts or on your credit card.

Equifax provides a service with a monthly alert of any claims against you – this paid service is fantastic for preventing fraud. These fraud alerts also encourage third parties to take more steps to verify your identity before extending credit. This makes it challenging for scammers to open new accounts in your name.

Never Transfer the Title of Your Property

Fraudulent companies and scammers are known to trick homeowners into relinquishing their title to a trust, claiming they will need to negotiate with the bank on the owner’s behalf.

Once the title has been transferred, these con artists can assume control of the property.

Retaining your property under your name is one of the best ways to prevent fraud.

Never Sign Documents with Blank Fields

While it may seem obvious, it’s worth mentioning that you should never sign a document with missing fields. If a contract has any blank lines, spaces, or missing content, don’t sign it!

If someone says, “We’ll fill that in later,” it’s a critical sign that it could be a scam. Don’t be afraid to bring documents to an experienced lawyer if you don’t understand what you’re signing.

By taking these proactive steps, preventing fraud is simple. In turn, this will also prevent the time, tears, and frustration that also comes with getting caught up in a scam.


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