Issue gained attention in 2023 amid Toronto police investigations in which two homes were allegedly listed for sale without the owners’ knowledge
It’s been years since you finished paying off your mortgage, so the letter in the mail from a bank saying you’re in default and now owe money comes as a shock.
While those were “extreme” cases, more common is mortgage fraud, where fraudsters obtain a mortgage from a lender under false pretenses, said Daniel La Gamba, a real estate lawyer and partner at LD Law LLP. “Sometimes, we’re really left with only our gut feeling. If something doesn’t smell right, then we start digging and asking a few more questions.”
“If you don’t have title insurance, that’s when you’re on your own … and it will be a very costly and time-intensive endeavour.”Title insurance companyFCT estimates at least one attempted title or mortgage fraud takes place every four business days. In the past two to three years, the company has refused to insure $539 million worth of mortgages and transfers “on the basis that they were too suspicious for us,” said John Tracy, senior legal counsel at FCT Canada.
Daniela DeTommaso, president at FCT Canada, said the company began tracking attempts at title fraud in 2010, seeing a 70 per cent increase in the first 10 years. She said that rate likely accelerated during the pandemic as reliance on remote technology and digital verifications increased.