Honey, there are strangers living in our house

Stephanie* first noticed something strange when she logged online to pay her monthly bills. She and her husband, Derrick, had moved overseas and rented out their house in Etobicoke, Ontario.

image: Business in Vancouver

Their mortgage was apparently paid off.  After making some calls, sure enough, her mortgage was closed.

It was too good to be true. “We knew something was wrong. We weren’t the ones to close our mortgage,” Stephanie told CBC Toronto.

“But we didn’t know the extent of it,” she added.

The couple’s property management company went by their house only to have a stranger answer the door claiming to own the home.

That’s when it clicked; they didn’t own the house -the stranger did.

According to police, a man and a woman used fake identification to pose as the homeowners. They then hired a realtor who listed the house for sale.

The house was sold and new homeowners took possession.

Brian King, an investigator who examines these kinds of crimes, says title fraud was almost non-existent before the pandemic. Now he receives reports of titles being fraudulently transferred as often as three times a week.

It works like this: A team of criminals track the homeowners, forge their ID cards, open fake bank accounts and eventually impersonate them in dealing with real estate agents, lawyers and financial service providers.

Criminals often target homes that have been vacant for some time, as well as homes that have small or no mortgage balances so they can maximize their profits when a sale is made.

Actors are part of the team and they study their parts as owners carefully.

“Some of these people that are impersonating homeowners should be getting Emmys – they’re good actors,” says King, adding that the impersonators receive thousands or tens of thousands of dollars for their roles.

Homeowners can buy insurance for title fraud that also covers other issues regarding titles, including land survey mistakes and bylaw compliance. But although the premium is relatively cheap, claims can be expensive.

Often, the new “owners” are the biggest losers.

Chicago Title Insurance Company did not have a single record of total title fraud from the firm’s founding in the sixties to 2019. But now, the company is dealing with more than 30 claims in the GTA and Metro Vancouver, according to its senior vice-president.

It’s not their fault, says the Toronto Regional Real Estate Board. They claim that identity theft is the problem. I don’t think so. While identity theft is clearly part of the operation, the lack of due diligence on the part of realtors is the problem.

Real estate brokerages are not doing enough to prevent title fraud when they accept two pieces of plastic ID that can be easily forged. In one case, a photocopy of a passport was accepted. It would take considerable skill to forge a passport but a photocopy would be easy.

Instead of passing the buck, brokers should make multifactor-identifications in which someone’s bank accounts, cellphone number and ID are all being checked to confirm their identity.

It’s hard to image what a nightmare that would be: finding strangers living in your house and selling off your stuff.

*Stephanie and Derrick are not their real names because they are the victims of identity theft.


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