Investigators and official warnings suggest that mortgage and title fraudsters, who impersonate homeowners and renters, have targeted at least 32 properties in Ontario and British Columbia.
Insurance investigator Brian King, president and CEO of King International Advisory Group, said his firm had received 30 such claims in Ontario.
They include six examples of “total title fraud” in which con artists pose as homeowners to list properties for sale.
In B.C., the Land Title and Survey Authority warned in 2021 that there had been two attempted title frauds involving the impersonation of owners living abroad.
King said that such impersonators had to perform “Emmy Award worthy”, but they were not the only people involved in the scam.
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“What did you get the sense that the people who are doing this, this is a group? Many people are required in making the process work,” said Raja.
He said his firm was handling six claims of title fraud in total, several coming to light after recent media coverage of the fraudulent technique.
King’s investigation includes the case of Toronto condo owner Mophie Yu, who discovered his two-bedroom downtown property had been listed and sold for $970,000 last year by someone using his name.
The title to the property now lists someone else as the owner, although a “caution” notice has been placed on the document by the Director of Land Titles, indicating it is disputed. Toronto Police confirmed they are investigating.
King said that total title fraud was once “very, very rare” but now it seems that “every other file that comes in is a total title transfer.”
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The BC Land Titles and Survey Authority said in a March 2021 notice that it was aware of two cases involving property managers being tricked into taking instructions from fraudsters impersonating owners living abroad.
It said that one of the frauds was successful.
The notice said, “Both the properties were listed for sale by the realtors, who accepted the scanned copy of the forged passport to verify the identity of the purported owner.”
King said title and mortgage fraud typically involves homes with little or no mortgage. Fraudsters, after identifying such a house, do research on the names of the landlords to create fake identities.
He said “actors” are paid $5,000 to $10,000 to put the property on the market and seek a sale “fairly quickly” with an unmatched buyer.
“They are not necessarily going for a higher amount because they want to deal with it quickly. The quicker they get in and out, the better,” said Raja.
He said a recent case his firm investigated involved a home in Ontario valued at $2.2 million.
The original owners contracted a property management company to rent out their home after they moved to England for work.
But it was rented out by counterfeiters who moved in, impersonated the owners, and sold it within two weeks for $1.7 million.
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In another type of property fraud, impersonators pose as home owners to obtain mortgages from private lenders, King said.
Compared to total title fraud, King said mortgage fraud was much “easier and faster”.
But the potential payoff for total title fraud was enormous.
“When they sell to an unknown[buyer]they not only get the mortgage amount, they get the equity amount as well,” King said.
He said the outright title fraud resulted in a legal “mess” that could take the courts a year and a half to sort out.
Daniela De Tomaso, president of First Canadian Title Company Ltd., said the firm has seen a “definite increase” in title fraud.
Although he could not say how many cases he had found, Tommaso said it was increasing, although “small numbers” were involved.
Tommaso said the sophistication of fraudsters is increasing.
“We’re seeing identity theft where when you look at an ID, unless you’re trained, you’ll never be able to tell it’s falsified.”
He said people with home title insurance targeted by fraudsters can escalate the matter to their insurance company, contact the police, notify all parties involved, and hire attorneys to fix the problem. Huh.
But in some cases, home owners avoid lengthy court proceedings and walk away from the property, taking payment in return.
Nisha Hothy, director of communications for Mainland BC’s Better Business Bureau, said title fraud reflects the importance of protecting personal information “like gold.”
“When you’re getting rid of any bank documents, bills and etc., make sure you shred them, you don’t want your bank account numbers, your social insurance and other personal information in there,” she said.
Hothi said another solution is to request alerts on title activity on the property, such as someone attempting to foreclose on it.
Yu, who now lives in China’s Hubei province, said she could not sleep when her home was burgled because she was working with her insurance company and King to find a solution.
“Hopefully, I can hear some good news this year,” Yu said.