Though the vast majority of people keep all their dealings on the up and up, employing trustworthy people to do their accounting and bookkeeping services in Toronto and telling the whole truth about their circumstances when they go to borrow money, not everyone is so honest. In fact, dishonest people have been known to take advantage of honest ones by taking their identities and committing fraud. Mortgage fraud is becoming increasingly common. Here's some information on this type of crime so you can keep your eyes open for it.
In a mortgage fraud, the mortgage applicants, who may or may not be using their own identities, apply for a mortgage using falsified documents. Sometimes it will be documents that say they purchased the house for a lot more than they really did. Sometimes it will be that they own a home that they would like to take out a mortgage on, when really they do not own the home. In the first case, the buyer pockets the overage. In the second, they disappear as soon as the bank grants them the money.
What are the emerging fraud schemes?
You may be thinking: "but I would never lie to the bank when I went out looking for a mortgage, so how can this affect me?" It can easily affect you because fraudsters may decide to present themselves as you, using fake documents and ownership papers. If the bank fails to check into their identities and appraise the home in person, these fraudsters can actually sell your house out from under you and leave you with either a huge mortgage to pay or a confused buyer at your door with his belongings, which can be a huge mess to sort out.
In most cases, the onus on preventing mortgage fraud lies with the bank, the mortgage broker, and the lawyers who notarize the fake papers. If any of these people fail to do their due diligence by appraising the house in person, talking to the people living there, verifying the borrower's income and identity, and doing a title search with the municipality on the home, you can pay the price. However, according to new laws in many locales, you cannot be held responsible for their mistakes.
There are a few things you can do to prevent mortgage fraud on your end, though. There are different types of title insurance, such as a home ownership protection policy, that you can purchase to guard against someone using a mortgage calculator to sell your property. Want to know how to apply for a mortgage? You can also keep important documents, such as your title, in a safe place such as a safety deposit box, and shed all documents with your name and personal information on them before you discard them to prevent identity theft.