How organized crime has mortgaged or sold at least 30 GTA homes without owners' knowledge

[M1917 Enfield]

Who has their mortgage paid off?

Better watch out, your home is a target now for resale without your knowledge!

Maybe that is why Dear Borrower mortgaged and borrowed so much against Canada's credit line so that others could not sell it out under us? Smart thinking!




How organized crime has mortgaged or sold at least 30 GTA homes without owners' knowledge

Future of title insurance could be at risk if this real estate fraud trend continues

John Lancaster, Nicole Brockbank, Farrah Merali · CBC News · Posted: Jan 23, 2023


A year ago, Melissa Walsh says police assured her family it only happened to them. Fraudsters nearly sold her great uncle's east end Toronto home without the family's knowledge.

"We were told to move on, get over it," she said.

But earlier this month a Toronto police press release revealed another case where scammers successfully sold a house before the real homeowners found out what happened.

And now it turns out those two cases are likely just the tip of the iceberg.

CBC Toronto has learned that a handful of organized crime groups are behind these real-estate frauds — in which at least 30 homes in the Greater Toronto Area (GTA) have either been sold or mortgaged without the real owners' knowledge. Those revelations come from a private investigation firm working for a title insurance company to try and get to the bottom of the scams, which are costing insurers millions in claims.

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"It's a very painstaking process to try and understand who's behind it," said Brian King, president and CEO of King International Advisory Group.

"We're sort of aware of four or five loosely organized groups that are working in the GTA."

The firm is currently investigating four title transfer frauds across the GTA where the ownership of a home was stolen using identity theft to cash in on the sale of the property. And at least another 26 mortgage frauds where mortgages have been registered on a home without the owner's consent to obtain the cash value of the mortgage.

Melissa Walsh, whose great uncle's Toronto home was listed for sale last year after someone impersonated him, says at the time police told her family they were the only people who had experienced the fraud.

"Hearing that this has happened to potentially over 30 other families is hard to wrap your head around," said Walsh. "I don't understand why this hasn't been discussed before this point."

In addition to the four claims King is investigating, the three other title insurers offering coverage in Canada told CBC Toronto they've also all received fraud claims where a homeowner's property was sold without their knowledge. However they couldn't provide specific numbers before publication.

Karen Decker, senior vice president for Stewart Title, said the company has had "many more than one" case of a house being sold out from under the real homeowner in the Toronto area.

How the scheme typically works

So how does this actually happen? King says an organized crime group starts by looking through publicly available property records for a home without a mortgage — or a small one where there's still a lot of equity left in the property — as a target.

From there, the groups who ultimately receive the fraudulent funds use stolen IDs and hire "stand-ins" to pose as tenants to gain access to the home, and other "stand-ins" impersonate homeowners to mortgage or sell it.

"A lot of times they're petty criminals that are paid anywhere from $5,000 to $10,000 to stand-in and pose as the homeowners," said King. "The people behind the frauds do not want to be front-facing."

The Toronto Police Service is seeking the public's help identifying a man and woman wanted in connection with a complex mortgage fraud investigation.

Earlier this month, the Toronto Police Service put out a press release seeking the public's help identifying this man and woman wanted in connection with a title fraud investigation. (Toronto Police Service handout)

The stand-ins, like the pair Toronto police were trying to identify through a press release earlier this month, are also being shared between crime groups, according to King, depending on the ethnicity of the person needed to impersonate the homeowner.

After that, the mortgage or sale happens quickly. For the sales, the fake homeowners often accept the first reasonable offer they get.

"In most instances, [they're] very sophisticated people, the money is moved out of the fraudulent bank accounts usually within seven days," said King.

"It'll get changed fairly quickly either into cryptocurrency and moved about, or into gold bullion, and quite often it'll be shipped overseas immediately out of reach of the authorities here."

CBC Toronto reached out to Toronto police multiple times for comment, but no one was available to speak on its title fraud cases.

King says these cases pose a challenge for police because the organized crime groups can have several properties on the go at once across multiple jurisdictions.

Brian King, president and CEO of King International Advisory Group, says his private investigation firm is aware of 'four or five' organized crime groups committing title frauds across the GTA.

"In an ideal world, we would have some way of co-ordinating these efforts amongst the various regional and municipal police departments so that they get visibility and the links can be made," he said.

King's firm tries to trace where the fraudulent mortgage or home sale funds go for clients, and says they've been successful in getting money back in some cases. But frequently title insurance companies don't find out about the fraud until it's too late.

Future of title insurance could be at risk

In most of these cases, the real owner and the buyer are protected from most of the losses incurred through the fraud by having title insurance.

The insurance protects homeowners from fraudulent claims on their property and pays for legal expenses to re-establish the homeowner's title rights. If a buyer unwittingly buys a home that's been fraudulently listed, the insurance should also protect them. In cases like that, the true owner will likely get their home back and the unwitting buyer will get their money back.

But with title transfer and mortgage fraud claims skyrocketing, title insurer John Rider worries about the sustainability of providing this coverage in the long-term.

WATCH | Title insurance companies have lost about $200M since late 2019:

The extent of real estate fraud and its links to organized crime

A CBC News investigation has found that cases of real estate fraud where homes are being put on the market without the owners’ knowledge are more widespread than authorities initially indicated, and that organized crime groups are behind many of them.

"We went from zero of those claims to now many dozens," said Rider, senior vice president of Chicago Title Insurance Company in Canada.

"There's four title companies in the business in Canada and we estimate that industry wide, it's easily $200 million, probably more, in fraud claims in the last two-and-a-half years."

Chicago Title Insurance Company has received more than 80 mortgage fraud claims since late 2019 — largely from the GTA and Greater Vancouver Area. The other three title insurers shared similar concerns with CBC Toronto — about a growing number of mortgage and title transfer frauds in recent years.

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How to protect yourself from real-estate title fraud

"We're seeing a level of sophistication in that area that we've never seen before," said Daniela DeTommaso, president of title insurance company FCT. "It's very organized."

Rider wants to see the government step up and lead the way on bolstering ID verification standards for professionals — so they don't just rely on IDs — in these kinds of transactions.

"Otherwise [the government]'s going to find that they're going to have a lot of consumers at their doorstep begging for help because they've lost title to their homes," he said.




https://www.cbc.ca/news/canada/toron...edge-1.6719978

[Smc]

I’m sorry but we shouldn’t need ‘title insurance’ if people are doing their jobs.

[RangeBob]

I’m sorry but we shouldn’t need ‘title insurance’ if people are doing their jobs.

An actual title search costs about twice what title insurance costs, so most people just do title insurance these days. A real title search was between $100 and $200 the last time I checked, and sometimes delayed the sale.

Before the Ontario government (lots of local Land Title departments) sold the rights to maintain property title to Teranet (a Toronto computer data warehouse) circa 1991, access to the government data was free but you paid a professional to go look for you. I think Teranet does Manitoba electric title too.

[chrisc]

I wonder if you could just put a lien on your own home. That way if someone tried this nonsense the bank would have to pay you out for whatever insane value you put on the lien.

[762mm]

Earlier this month, the Toronto Police Service put out a press release seeking the public's help identifying this man and woman wanted in connection with a title fraud investigation. (Toronto Police Service handout)

[blacksmithden]

I wonder if you could just put a lien on your own home. That way if someone tried this nonsense the bank would have to pay you out for whatever insane value you put on the lien.

Doesn't having a lien on your house screw up your credit rating somehow ? Doesn't matter to me, but a lot of people seem to place a large value on their rating.

[SIR VEYOR]

I wonder if you could just put a lien on your own home. That way if someone tried this nonsense the bank would have to pay you out for whatever insane value you put on the lien.

Probably more like a home equity line of credit, but don’t use it. It should show a high % of property value on an electronic search, but maybe no real load on the owner.

And the county office recording the transaction aren’t a l8 evidence defence. Typically if they’re presented with anything checking the boxes, they have to accept it; fraudulent or not.

[Smc]

How are these people not caught right away? Did they get paid in cash? You would think that either they had bank accounts…

Ok so bank employees are involved as well. Hope those people have been arrested.

[M1917 Enfield]

Earlier this month, the Toronto Police Service put out a press release seeking the public's help identifying this man and woman wanted in connection with a title fraud investigation. (Toronto Police Service handout)

Apparently they are not the people doing the scam but low level paid front people, they say in the article how they use low level street criminals to be the front people who look race wise like the property owners surname would suggest. If they are scamming a retiree or Chinese named home owner the people presenting at the real estate office or bank need to look the part.

[M1917 Enfield]

Doesn't having a lien on your house screw up your credit rating somehow ? Doesn't matter to me, but a lot of people seem to place a large value on their rating.

I have a secured HELOC for 75% of my homes value (from 2003 bank home value assessment, so now only about 40% of my homes current value) that I use to buy stocks with and it has not hurt my credit rating at all.