Fraud relating to real estate ownership in January 2004 rose to record levels, according to First Canadian Title, one of Canada’s major title insurance company.
First Canadian Title says in January the value of fraud claims equaled 28 per cent of all fraud claims made since the company was founded in 1991.
“Our recent trends analysis identified an alarming increase in real estate fraud, as well as a certain type of real estate transaction where fraud more commonly occurs,” says Patrick Chetcuti, COO of First Canadian Title.
As a result of the increase in claims, First Canadian has changed its policy application process in order to better screen potentially fraudulent transactions. The company says it has identified a high-risk group of transactions, including new mortgages that are used to purchase a property (not to replace or pay out an existing first mortgage), a transaction where the client is not known to the lender or the lawyer, or a transaction where the proceeds are being paid out to a third party, rather than the owner of the property.
“The real estate business has changed rapidly over the past few years, moving from a process commonly carried out at the local community level, where lawyers and lenders have face-to-face meetings with regular clients, to one with electronic application and registration, where consumers are often unknown to real estate professionals,” says Chetcuti. “And fraud is on the rise.”
For example, the City of Toronto recently introduced mandatory electronic title registration. In B.C., not only can property owners register their titles electronically, but their lawyers can register their signatures electronically as well, leading to fewer face-to-face meetings with clients. (CREA 04/02/2004)