Category Archives: mortgage fraud

Millennials comprise half of fraud victims—study

A recent study by consumer credit reporting agency Equifax Inc. revealed that the demographic most susceptible to fraud was the millennial sector, in defiance of common stereotypes that seniors are more liable to get swindled.

The survey found that approximately 50 per cent of suspect credit applications last year involved millennials and Generation Y consumers, ranging from 16 to 36 years old. The agency processes around 15 million applications annually in Canada, with 1 per cent of this figure being suspected fraud attempts.

Equifax officials attributed this significant proportion of young fraud victims to a still-developing understanding of the internet, even though this segment is considered the most “wired” generation ever.

“They are the more sharing, less caring generation. They think they are invincible and share way too much information online,” Equifax Canada chief privacy officer John Russo told the Financial Post.

Russo noted that fraud is often perpetrated against youngsters via phishing scams and fake in-app purchases.

“They can be caught with text or email. They get something like ‘opportunity to work from home for $1,000 a day or free downloadable ring tones.’ The younger generation just automatically clicks. They are playing something and it says ‘buy now’ and it’s a fraudulent site looking for information to get credit,” he explained.

The survey also found that Generation X consumers comprised 29 per cent of fraudulent application claims, with Baby Boomers coming in at 17 per cent. Approximately 53 per cent of Canadians reported having experienced financial fraud at some point in their lives.

Source: – by Ephraim Vecina | 22 Mar 2016

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A Guide to Selling Privately

A Guide to Selling Privately

With the market going through constant change, it is natural that Sellers would be thinking about selling privately to maximize their profit. This is a tough market and you have to be primed to sell, so here are some suggestions that might help:

1. Make sure that everything in you house, construction-wise is perfect or close to it.

99% of homes in this market will be inspected for flaws, so you need a knowledgeable 3rd party to go through your home to make sure it will pass a home inspection. You might even want to hire a pre-selling Home Inspection by a certified Home Inspector.

2. I suggest that you disclose in writing what the Home Inspector finds.

Certain issues could prove to be an out for a Buyer at or before closing time, if you knew them and did not disclose them at the time of the Offer.

3. Follow their advice especially if it entails storing a lot of clutter.

I would suggest off-site storage rather than filling the basement or garage to the brim. This just broadcasts to the Buyer one of the shortcomings of your home.

4. Once your home looks great, the number one step in marketing is correct pricing.

Make sure that you know what the most recent sales are (not listings, as they may be overpriced) and then reduce your house to reflect that you are not using an agent.. If you are offering your house privately, the buyer must perceive a benefit to them. The biggest mistake private sellers make is pricing their house within the market range and not reflecting that there is no commission.

5. Develop a web presence for your home.

Very few people buy anything today without searching on the Internet so your home-sale web site must be viewable by the largest market out there. Remember that your competition is National, Regional and Local MLS that have spent years and thousands of dollars to be in the top positions, not to mention the Brokers and Franchises.

6. Make sure that you hire a professional photographer who offers Virtual Tours or Video.

Buyers want as much information as possible before they even view the property. I believe in these photo formats so strongly that I even pay for these photos for vacant houses or ones needing major renovations. Don’t waste your time or the Buyers by alluding to qualities that are not there or could-be-maybe-potentially there…Let the buyer decide.

7. Post the site on or on

Both offer great visibility. However, make sure that you re-post often as they keep the newer posts at the top or on Kijiji you can pay to have your post on the front page for a period of time.

8. Make sure that any contact phone numbers or emails will be answered by you or someone else immediately.

Unless I am in a business meeting, I respond as soon as I can. Buyers, mostly come from a generation that views microwaves as slow cooking….you must be prepared to respond ASAP.

9. Realize that you will get a lot of phone calls from Buyer-agents who will tell you that they have clients that would be perfect for your property.

They may be right, so allow them to show your house. Remember they, like you, will not work for free so your pricing should take that into account.

10. Open Houses are the way that a lot of Buyers surf the marketplace to buy. Make sure that you use proper signage.

The City of Toronto mandates that all Open House sign show the address and time of the Open House. Make sure that you have visited the local stock of houses in your area with a Buyer’s eye. To be noticed you will have to be the best on the market that day.

11. If you receive an Offer on your property you should have a knowledgeable 3rd party (Lawyer) lined up and ready to take you through the contract, explain the clauses and watch for conditions or timing that could pose future problems.

When I sit down with clients, their first thought is price, mine is the terms and conditions. I have seen too many times when sellers became so obsessed with price that they forgot other “small” issues that by closing became “huge” ones. The job of the 3rd party is to make sure that those issues are not missed in all the excitement. Make sure that if that 3rd party is also giving you pricing advise that they know the market and have a grasp of negotiation skills and can view the issues from the Buyers side., when needed, to give you a dash of realism when you have a flight of fancy.

Note: when I have bought or sold for myself I have always run through my offer with an Office Manager or Lawyer for that important 3rd party viewpoint. Sometimes they have presented my own offer for me so I can have the proper emotional distance to make the right decisions.

12. The Toronto Real Estate Board has a consumer info page that shows six of the major Forms that are used in Ontario with the plain language explanations. Follow this link for more information.

13. Put all communication that occur between Buyer and Seller, after the Agreement of Purchase and Sale has been accepted through the 3rd Party, by email rather than phone.

Make sure that all is kept in an online folder until closing and up to 6 years after just in case.

14. Do not use the same lawyer to close the transaction for the Buyer and Seller so that you can “save” money.

Make sure that all parties in the transaction disclose, in writing, their relationship to either you or the Buyer. REALTORS must always disclose their fiduciary duty in writing at the time of the offer.

15. The Agreement will usually allow for the Buyer to visit your property for a Building inspection and visits to measure.

Make sure these are stipulated in the contract by both the number of visits and the length or you could be in for a big surprise when all the 20 long-lost buyers’ family members visit with three contractors looking to compete for quotes. I usually suggest two or three visits of no more than one hour at mutually agreeable times. I would suggest you not be there and .that all questions and answers be done in writing so there are no misinterpretations later…the old he said-she said.

16. Ask for a substantial deposit, 5-10% of the Purchase Price to be held by your lawyer in Trust.

The amount of deposit gives you a sense of the seriousness of the Buyer.

Annex Street And Houses
Annex Street And Houses

17. Conditions on Financing and Building Inspection: Most offers in this market will have conditions that must be met within a specified time period. Keep the time as short as you can.

For a Building Inspection or Financing, I suggest no more than three Business days. Hopefully your Buyer will have been pre-approved by the Bank and then there is little to do but a quick appraisal of your property. Building Inspectors should be able to complete a full inspection within 3 Banking days and give the report to the Buyer. Be aware that the Buyer may try to renegotiate the price if the Inspection is of poor quality.

18. Conditional on the Sale of the Purchaser’s Property: This is a tough one, made tougher because you have no control of the asking price of the Buyer’s Property.

You may have sold your property conditionally for a great price and find that the Buyer decides to overprice their home. In essence, your home is pulled from the marketplace with little guarantee that the Buyer will get a satisfactory offer and start the ball rolling. You might want to ask the Buyer to have a Professional appraisal of his property before agreeing to this Condition.

19. Do not accept any cash as part of the transaction.

FINTRAC (Financial Transactions and Reports Analysis Centre of Canada) is keeping an eye on suspicious movements of cash and I am authorized to ask for and retain the personal information of all Sellers and Buyers.

20. Be careful of Scam artists. They sometimes hunt for Private Sellers because they think that there will be less scrutiny in the transaction.

A client of mine whose brother helped her sell privately accepted a long conditional offer. A week after it fell through we listed at $399,000. Imagine our surprise when a Bank called to say they had an offer sitting on the desk of their fraud department for $540,000 of the property. The conditional Buyer was trying to finance a house for $150,000 more than the value. Thankfully, the transfer was held up by the Bank’s scrutiny.

Hopefully, some of these suggestions will help you sell privately but if not know that there are a number of excellent hard-working Realtors in the marketplace every day to help you. If you have any further ideas, please feel free to comment!

Source;; Richard Silver and Penny Brown

Has your home been fraudulently overpriced?

Eight years ago, back when Laura Kemp began her career as an appraiser, her father-in-law, also in the business, shared one of his weirdest home visits.

The bank once sent him to check out a bungalow on a 20-acre lot outside Winnipeg, requiring a full appraisal before it would release the funds for a mortgage. But when he arrived there after hours of driving, he was in for a surprise.

Indeed, there are all kinds of ways unethical home buyers and sellers dupe their way into a bigger mortgage or better selling price. Whether driven by greed, desperation or opportunity, fraudsters have been caught doing everything from inflating salaries on mortgage applications to posing as a legitimate property owner, taking out numerous mortgages and fleeing with the cash while the real owner is left picking up the pieces.

Yet there’s another real estate scam that tends to fly under the radar, but can still have serious ramifications: mortgage valuation fraud.

Also known as appraisal fraud, it’s used to artificially and deliberately raise a property’s value by having it appraised above its market value. In some cases, an appraiser is in on the con, but more often their report is tampered with after the fact, without the appraiser’s knowledge. Sellers are either trying to convince buyers the house is worth more than it is or the buyer is fudging numbers to make it appear the home is a great deal, thus less risky for the lender.

Value fraud tends to be easier to pull off in hot markets when house prices are skyrocketing, and an unexpectedly hefty price tag seems genuine. What’s more, buyers who are worried they will be outbid on their dream home – again – might be loathe to ask for independent appraisal reports, even if they have a niggling feeling the current appraised price seems unnaturally high.

“If I’m in an overheated market and want to make a deal, that’s a situation where fraud is more likely to happen,” maintains Keith Lancastle, chief executive officer of the Appraisal Institute of Canada in Ottawa.

While there are no hard numbers and national statistics tracking how prevalent this particular type of fraud is in Canada, back in 2012, Equifax, the consumer credit company, released a report stating that two-thirds of all fraud uncovered that year was real estate related, at $400-million.

That might just scratch the surface of Canada’s $1-trillion-plus mortgage industry (and again, it reflects only illegal dealings that came to light), but the problem may have gotten the lenders’ collective attention. Ms. Kemp says many of the big banks and credit unions have put new guidelines in place to eradicate bogus reports.

Want to show your appraisal to the Bank of Nova Scotia or Toronto-Dominion Bank when applying for a mortgage? Sorry. It’s got to come directly from the appraiser’s e-mail account now.

“Obviously they’ve seen enough cases of appraisals being altered to put that new rule in place,” she says.

Raymond Leclair, vice-president, public affairs at Lawyers’ Professional Indemnity Company (LAWPRO) in Toronto, with 25 years as a real-estate lawyer, says fraud goes underreported, partly because financial institutions consider the risk part of doing business.

“They’d rather lick their wounds until it gets out of hand,” he says.

Unfortunately, the cost increases as organized fraudsters turn to house “flipping” to falsify home values and make big money. They buy a cheap home in a good neighbourhood for, say, $200,000, turn around and sell it to a buddy for $250,000, who then sells it again to someone else on the take for $300,000. Eventually, the house gets unloaded on legitimate buyers for an inflated price and they have no idea they have just overpaid.

No one wants to be that person, so it’s not a bad idea for potential buyers to get their own full appraisal, which includes a three-year sales history.

“If you saw bump, bump, bump on the subject property, that would certainly raise a red flag,” Mr. Landcastle says.


While most appraisals are requested by banks and lenders, about 10 per cent are requests from individual buyers, says Laura Kemp, owner of Winnipeg-based Kemp Appraisal Ltd.

Experts advise potential buyers, especially those participating in private sales, to stay sharp and cast an eagle eye over details to help protect them from mortgage value fraud.

Quantity counts

You’ve fallen in love with a house back-split in a child-friendly neighbourhood and the private sale is going ahead just fine and the seller gives you the one-page report. Wrong. “That’s not an appraisal report,” Ms. Kemp says, explaining it should be about 10 pages long. “Why haven’t they given you the entire report? Ask for the whole thing.” And don’t forget to look for the appraiser’s signature.

Best before date

Appraisal reports are only relevant for so long. A neighbourhood or whole city’s real estate landscape can change quickly (such as Calgary recently) and that old appraisal might be out of date. The general rule? If it’s more than 90 days old, it’s time for a new appraisal. That is usually the lenders’ rule, too.

A trifecta of trickery

When reading an appraisal report, look at the effective date – and the appraised value – wherever they appear, usually at least three times in a report. Ms. Kemp says that fraudsters might forget to fudge the numbers and dates all the way through the document. “They change one, but are not smart enough to see it’s there more than once.”

Know whom you’re dealing with

Cases across the country these past few years have revealed criminal rings engaging in mortgage fraud schemes, which included lawyers, bank employees and mortgage brokers. Get references from friends and family for real-estate professionals. “You always have to ask yourself, ‘Okay, who stands to benefit from this transaction going through?’” Mr. Landcastle explains. “Will they cross that legal or moral line to make it happen?”

Protect yourself from real estate fraud

A stack of files labeled 'real estate fraud'

Source: Financial Consumer Agency of Canada
Real estate fraud

In Canada, real estate fraud is not as common as other types of fraud (such as debit or credit card fraud). But for the victims, the financial loss can represent a significant loss—since it can mean, in the worst case scenario, losing their home. It is important to know that real estate fraud exists, how it happens and how you can protect yourself against it.

There are various types of real estate fraud. Two types of real estate fraud that may result in financial loss for consumers include title fraud and foreclosure fraud. Read on for more information on each type.

Title fraud

When you buy a home, you buy the title to the property. The lawyer registers you as the owner of the property in the provincial land registry system.

Title fraud starts with identity theft, which occurs when your personal information is collected and used by someone identifying himself or herself as you. There are many ways criminals can steal your identity without your knowledge, including:

  • dumpster diving
  • mail box theft
  • phishing
  • computer hacking.

They then use your identity to assume the title of the property and sell the home or get a new mortgage. For example, if you already own a home, a criminal could fraudulently discharge your current mortgage, transfer the title, secure a larger mortgage and put the home under his or her own name.

Once the money from the sale or new mortgage is advanced, the criminal can leave with the money. You might not be aware of the fraud taking place until after it has been committed. You may find out once the mortgage lender contacts you about mortgage payments you have not made, or someone knocks at your door claiming to be the new owner of the house.

If you no longer have a mortgage on your home or, if you rent out your home to someone else, you might be a target for title fraud because in these circumstances it may be easier for them to use your property title to get a new mortgage or to sell your home.

Foreclosure fraud

Foreclosure is the legal process where a mortgage lender takes possession of a consumer’s home and sells it to cover the mortgage debt the consumer has incurred but has been unable to pay.

In the scenario where a consumer is having difficulty making mortgage payments and facing the possibility of foreclosure, a criminal will take advantage of the situation by offering the homeowner a loan to cover expenses and consolidate loans, in exchange for up-front fees and an agreement to transfer the property title to the criminal. However, in contrast to real debt consolidation programs, the criminal will keep all the payments made by the owner and ignore bills and taxes.

The criminal could also sell the house or re-mortgage it and leave with the money. In the end, the homeowner will lose the home and still be in debt.

Protect your house from real estate fraud

Because most real estate fraud involves some kind of identity theft, to protect your home from real estate fraud, you should protect yourself against identity fraud first. Read FCAC’s tip sheet, Protect yourself from identity fraud.

You can take other actions specifically to protect yourself against real estate fraud.

  • Contact your mortgage lender first if you are having difficulty making your mortgage payments.
  • Consult your lawyer if you wish to give another person a right to deal with your personal assets, and make sure you cancel this right if you don’t need it anymore.
  • Consult your provincial land registry office to ensure that the title of your home is in your name.
  • Check your credit report regularly to ensure the information is accurate. You can get a credit report for free by mailing your request to one of the two credit reporting agencies, Equifax and TransUnion.
  • Consider getting title insurance. Title insurance covers losses related to title fraud and legal expenses to restore a title. There are two types of title insurance:
    • lender title insurance, which protects the lender until the mortgage has been paid off
    • individual title insurance, which protects the homeowner from losses as long as you he or she owns the home, even if there is no mortgage.
Things to do if you are victim of real estate fraud

As soon as you discover that you might be victim of real estate fraud, you should:

  • contact the Canadian Anti-Fraud Centre (CAFC), a national anti-fraud call centre, at 1-888-495-8501
  • report the situation to the police, and record the police report number
  • report the fraud to the two credit-reporting agencies, Equifax and TransUnion
  • contact your provincial land registry office as soon as possible. Find out what laws may exist in your province to protect you if you are a victim of real estate fraud. Contact your financial institution. Keep all of the documents that provide evidence of the fraud. Record the name of the person you spoke to at the bank, as well as the date and time you called and when you became aware that you are a victim of fraud.
For more information

For more information on real estate fraud:

Need more information or advice on #mortgage_qualification, contact the The Ray McMillan Mortgage Team


6 tips to thwart identity theft and fraud

Vigilant online activity, watchful eye on mail can help reduce fraud risk

By Matt Kwong, CBC News Posted: Jan 20, 2015 5:00 AM ET

Meghann Johnston says the last three years have been "incredibly stressful" after her bank account was looted three times.

Meghann Johnston says the last three years have been “incredibly stressful” after her bank account was looted three times. (CBC)

(Note: CBC does not endorse and is not responsible for the content of external links.)

Financial fraud by identity thieves is simpler than victims might suspect, experts warn. But even anti-fraud educators were surprised by the case of Meghann Johnston.

The former RBC customer’s accounts were compromised three times in at least two different branches of the bank, apparently by someone without a client card or PIN who managed to withdraw tens of thousands of dollars.

“It’s an unprecedented story in recent years. I cannot recall anything like this,” said Avner Levin, director of Ryerson University’s Privacy and Cyber Crime Institute.

“That it was in person, that it was done multiple times, and at the same bank, I’m really taken aback,” added Kelley Keehn, a personal-finance expert and author.

Although anti-fraud experts noted that Johnston’s case is rare, they said most consumers can avoid experiencing that kind of stress and financial heartache by adopting some new habits and correcting some bad ones.

Get ahead of the potential problem

It never hurts to give a heads-up to your credit bureau, whether or not fraud has occurred, advised Keehn.

Putting a proactive fraud alert on an account for as little as $5 through TransUnion or Equifax would ensure that anyone attempting to apply for credit in that person’s name would send out a flag alerting the lender to call the applicant directly first.

“If you haven’t been a victim but you’re still scared of all these breaches, you can still get that extra layer of security,” said Keehn, author ofProtecting You and Your Money, a 2014 identity-theft and fraud guide published by the Chartered Professional Accountants of Canada.

Beware of oversharing online

Resist the urge to brag. Vacation announcements, life milestones and financial achievements might be interesting news to share with friends, but it can also entice enemies seeking to exploit your social media activity for their gain.

“Everything you post online tells a story about you. It’s your birthday, or you go to this university, or you post that you just got a line of credit from the bank,” said Athena Mailloux, program co-ordinator for the Fraud Examiners’ program at Humber College.

“A lot of people don’t realize when they’re tweeting out all these bits of information, a fraudster’s job is to troll and put the story together to then become you.”

Don’t neglect your freebies

By law, you’re entitled to one free credit report per year anyway. So why not keep abreast of your credit score? Take the time to go through it in detail. If there is a discrepancy, call the 1-800 number on the back of your debit card and request to speak with identity-theft assistance services.

“That’s free as well, so take advantage of it,” said Mailloux, who owns a practice as a forensic accountant and has helped design identity-restoration services for credit card firms.

“Call the number on the back of your credit card or debit card, and they can refer you to free services where you can just ask general questions about how to protect yourself,” she said.

The Canadian Anti-Fraud Centre also has a toll-free line and a victim assistance guide for consumers who suspect they have been defrauded.

Keep a close eye on the mailbox

If you receive statements by mail, be aware of your billing cycles. It may even be worth logging your bills as they come in and providing a padlock so a postal carrier can lock your mailbox upon delivering mail, lest your statements with your financial details fall into fraudsters’ hands.

If expected mail doesn’t arrive on time, look into it sooner rather than later, said Daniel Williams, a spokesperson with the Canadian Anti-Fraud Centre.

“You’ll spot it way quicker than if you wait around until you smell the smoke and see the fire,” Williams said. “Criminals are very clever at only redirecting one person’s mail in a household so you might not notice the total volume going down to the point where it would be an issue.”

Shop securely online

Stick to trusted online retailers when making purchases online with a credit card. Rob Goodfellow, a former Ontario Provincial Police superintendent who heads the private investigations firm Investigative Research Group, suggests consumers look for signs of secure payment such as PayPal or Verisign.

“I’ve had a PayPal account that’s never been breached, and I always set up an individual account so if somebody does crack into it, they’re only going to get my limited funds in there,” he said. “Keep it outside your mainstream banking.”

Goodfellow also warns shoppers never to make purchases on public or shared computers. Bit if you do, he said, remember to clear the cache and cookies.

Be smart about paper trails and passwords

Don’t leave restaurant receipts on the table, and destroy documents you no longer need.

A paper shredder is a worthy investment, said Bruce Dorris, program director at the Association of Certified Fraud Examiners.

“Everyone should have at least a small one in their house,” he said. “People will leave paper checks on their desk, but somebody can take one off the bottom and it’s not readily identifiable. Be vigilant about your surroundings.”

The same goes for passwords for computers and mobile devices. Dorris suggests changing passwords every month, or at least every three months.

Strong passwords may include a mix of numbers, upper- and lower-case letters and symbols.