Title Fraud… or While you were sleeping I sold your house.
These are the words that came to mind today while reading the Saturday edition of the Toronto Star. Half the front page was dedicated to introducing a story... a story that took up 2 pages inside the paper... a story that made me think those words. An 89 year old man was the victim of title fraud... The first thing I asked myself was, “What is title fraud?” The answer to that question is why I'm posting here... Title fraud starts with Identity theft... Most people are well aware of identity theft these days.. Someone steals your identity, obtains a credit card in your name and runs up bill. However it can be much more serious. Generally with credit card companies, since it wasn't actually you, they forgive the debt... making that form of identity theft the least of your problems. Identity theft involving title fraud can leave you homeless.
First, I steal your identity... remember that email you received last week from your bank asking you to confirm your account details.. Gotcha! So now I can pass myself off as you. Now I, acting as you, go with my buddy to a lawyers office and sign a deed over to my buddy. The lawyer checks out our ID and notarizes the deed for a couple hundred bucks. Now my buddy walks down to the local bank and applies for a mortgage. The bank does a quick title check and sees that indeed my buddy does have the title to that land. They give him $300,000 and he walks out. We then make a run for it and look for another city and another victim.
So you're sitting there thinking big deal, it's the banks fault... well then, the jokes on you. Given current Ontario law the bank owns your house. That's right... the Ontario Court of Appeal decided that a fraudulent mortgage is valid. The bank can kick you out, and sell it. The ran a title search and my buddy was the owner according to the title search. You are left without a house and there's not a whole lot that you can do. You can attempt to obtain your money via the Land Titles Assurance Fund,however they are backlogged with claims and it could take years (in addition to thousands of dollars) before you see your money again. In the mean time I bet the back seat of your car looks like a wonderful place for your family of four to sleep.
This has been happening for years, however with recent increases in identity theft, there are increases in title fraud. The government keeps saying that they are trying to help the victims but they still haven't stepped in and changed the laws or amended the Land Registry Act. In the mean time, you may want to look into title insurance but even that won't save you now, thanks to the Ontario Court of Appeal many insurance companies are refusing the claim because the mortgage is valid, even if the title was forged.
So remember... the next time you're sitting back in your chair, enjoying a a steaming mug of mocha java... that knock at your door, it might not be a visitor. It might be the bank informing you that you no longer own your home. You can thank the government and the system for not feeling the need to protect you, perhaps the Prime Minister will let you sleep on his couch while they sort this out and do the right thing.