Fraud Alert! What you need to know...

As I'm typing this post on mortgage fraud, I can't help but hear Oprah's voice in my head. No, she hasn't recently done any shows on mortgage fraud but the "what you need to know" starts off seemingly every show aired that plans on informing the general public of something you weren't previously aware of but most definitely should be. The second most famous line she uses is "all new..."

For this weeks all new post, I'll be enlightening you on what you need to know about mortgage fraud. Having recently sat in on a presentation from First Canadian Title, I'm confident that the majority of us brokers in attendance promptly went home and signed up for title insurance.

What is title insurance?

Title insurance covers you if someone fraudulently obtains a mortgage on your home. It also protects you from a myriad of other potential issues, such as errors in surveys, incomplete/out of date real property reports at the time of purchase, legal fees required to resolve title issues, problems if the previous owner completed renovations without a permit, etc.

An example that was shared with us was of someone who had moved into a property whereby the garage extended by several feet onto the city-owned back lane. My details are likely to be somewhat limited here as this is from memory but the gist of it is this: the property was in this condition when it was bought. A City of Calgary encroachment agreement was obtained from the City of Calgary at a cost of $500, basically stating that the garage is, indeed on city owned property by a margin of several feet. When they wanted to develop the back lane, the garage needed to be moved. However, if it was moved the other way it was then situated too close to the home and deemed a fire hazard.

Luckily the owner of the property had title insurance so they stepped in and valued the home's worth with/without the garage, found the garage to be worth an estimated 15K and reimbursed the homeowner in that amount. The $500 City of Calgary easement essentially served no purpose and for that cost (and technically much less) the owner could have bought title insurance as a one-time fee, for the duration of time that they live in the home.

See the below link for an eye-opening, first hand account of a BC elderly man who was the unfortunate victim of mortgage fraud. His home, valued at 600K had a fraudulent mortgage of 400K taken out on it and this story is currently being fought out in court.

http://www.househunting.ca/buying-homes/story.html?id=9664ef04-9afd-4561-83de-fdaabf6a907f

Also:

http://www.protectyourtitle.com/reallifefraudstories.htm

How much does it cost?

Compared to the majority of insurance premiums, it is relatively inexpensive as it is a one time cost for the duration that you live in that home.

If your home is under 500K, the cost is $299 (with a mortgage; $200 without an existing mortgage)
For homes valued over 500K, add an additional $1/per $1000 over the 500K.

Identity Theft

Might as well cover yourself from identity theft while you're at it. For lifetime coverage it will cost you $40. This way, no one can ever impersonate you and take out a mortgage in your name.

Contact me at leah@mortgagegrp.com or 403.630.9534 for more information on how to sign up.

Habitat for Humanity

Habitat for Humanity

Are you one of those people who are savvy with their flea-market finds? Love a good bargain? Did you know that there is a Habitat for Humanity store right here in Calgary where you can spend an afternoon looking through new and used furniture, appliances and building products? This is a great place for someone like myself, who devours HGTV and dreams of spray painting 1950's ornate silver chandelier with a color called "pearly pebble" and declaring it brand new. Generally those of us who have envisioned what our homes might look like if we were to declare our own personal 'home heist' a la Justin and Colin style, it would be an impressive feat. Sadly time, energy and plain skill are often lacking and we resort to maintaining the status quo.

There are places in Calgary such as the one listed above that won't break your wallet but will help you indulge your inner design diva. Another store recommended to me but which I have not as yet visited is the Consignment Gallery, located at 533 - 58th Ave SE. The information I received is that this is a great place to shop for pieces that were previously used to decorate show homes and we all know how gorgeous those homes are decorated. Their stock is thus constantly changing so it is certainly worth popping in from time to time.

Lastly, Fine Furniture Outlet off of Edmonton Trail is great for quality furniture (think kitchen tables, bedroom sets and sofas). When I was last there over a year ago they had scads of thick catalogs from various furniture stores in Calgary and should you be after a particular piece, they may be able to order one for you at a discounted price. Worth looking into.

I should mention that I have a personal soft-spot for Habitat for Humanity as in the upcoming week I'll personally spend a day volunteering with a group of mortgage broker's and lender's that I work with on a home in Evanston, in northwest Calgary. I'll be sure to post a few pictures alongside a story about that experience in a future post.

October Ratios...2008

Many people are discussing the slowing down of the Real Estate Market in Calgary right now, whether they are in the market for a home or simply chatting in the grocery store line-up. A recent article published by the Calgary Herald on November 4th, 2008 listed several statistics comparing this past month with that of May 2007 and the results are clear.

Currently single family homes are selling at a ratio of 1 home for every 6.74 on the market. Back in the mayhem of May 2007 this same comparison was 1 home for every 1.86 on the market.

Realtors have said that October is historically a slower month in terms of sales although certainly the ever changing economy and uncertainty in the marketplace have put many home buyer's on edge.

The bright side to all of this is that for people looking to enter the market they would be doing so at a great time. Selection is abundant, buyer's are in control, and mortgage interest rates have remained relatively stable. Having said that, while the Bank of Canada has certainly lowered their "prime rate" to all-time lows recently, financial institutions have responded by removing any product which offers a variable rate at a discount. Rather, a 1-2% increase will be tacked onto prime rate.

I would caution new buyer's on trying to 'time the cycle' which could be compared to trying to catch a falling knife - next to impossible. Buyer's need to realize that saving 5-10K on a home by waiting may mean a 0.2% increase on their mortgage rate which could be significant when looked at over the term of a mortgage.

Nifty new product for your home

I noticed these interesting teardrop I.Pod speakers on www.mollaspace.com recently and thought that they might appeal to more people than just myself. It's likely that we all have a central speaker system set-up in our homes but not many of our homes are outfitted with speakers in every room. The next time you're getting ready to have a nice night out, you could place this water resistant, compact speaker on your sink edge, take it with you to the beach (depending on where you're from) or simply into the great outdoors while camping. Not all I.Pod/MP3 players will fit though, so please check the website for size restrictions. Happy shopping!