Diana Young Professional Corporation

Barristers, Solicitors, & Notary Public

Real Estate Fraud

Real estate fraud is a broad term used to describe the various types of fraud that exists in the real estate industry.

Mortgage Fraud

Mortgage fraud is a type of real estate fraud that affects the financial institutions that lend money for purchasing property. The more common form of mortgage fraud involves the fraudulent personnel purchasing property and then artificially increasing the property's value through a serious of sales and re-sales between the fraudulent personnel and someone in co-operation with them. A mortgage is then secured on the property based on the property value that much higher than the market value of that property. When the property is sold at power sale on the market, the net proceed from the sale left to the financial institutions is much lower than the mortgage fund they advanced.

Title Fraud

Title fraud is another type of real estate fraud that most often harms the individual homeowners and their lenders. Title fraud typically involves a fraudulent personnel using stolen personal information or forged documents to transfer a registered owner's title to him/herself (or an accomplice) without the registered owner's knowledge. The fraudulent personnel then acquires a mortgage on this property and once the mortgage funds are advanced, they disappear with the money.

Ways to Protect Yourself

Real estate transactions are costly and either party cannot skip or avoid steps for simplicity so there are a few ways to ensure your transaction settles properly and worry free.

Power of Attorney
Be cautious when granting power of attorney. Whenever you give another individual a power of attorney that permits them to handle with your personal assets, you should consult with your lawyer regarding appropriate limitations and restrictions on the power granted by you.

Title Insurance
Individual homeowners can discuss with their lawyer about alternative methods of protection along with their benefits such as purchasing title insurance. Title insurance does not replace the role of a lawyer but it will give you a 100% assurance that your investment on the real property will be protected in case of a title fraud.


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