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 It also protects you from a myriad of other potential issues, such as errors in surveys, incomplete/out of date real property reports at the time of purchase, legal fees required to resolve title issues, problems if the previous owner completed renovations without a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.