Beware of Mortgage & Title Fraud: What Every Homeowner Needs to Know

In a world where identity theft and financial scams seem to be everywhere, protecting your home—the biggest investment you’ll likely ever make—has never been more important. While you may have heard of Ponzi schemes or phishing scams, mortgage and title fraud are real threats that could cost you your home if you’re not careful.

Let’s break it down and help you stay protected.

What is Mortgage Fraud?

Mortgage fraud typically involves criminals manipulating property values through phony transactions and securing inflated mortgages. These schemes often include people posing as legitimate buyers, sellers, or professionals in the mortgage process.

Red flags to watch out for:

• Someone offers you money to use your name and credit for a mortgage.

• You're asked to lie or leave information blank on a mortgage application.

• You're discouraged from seeing or inspecting the home you're buying.

• The seller offers to "rebate" cash under the table without disclosing it to your lender.

These are signs that something shady could be going on—and you don’t want to be caught in the middle.

The “Straw Buyer” Trap

This scheme usually involves someone with poor credit or no down payment convincing a person with good credit to “act” as the buyer. The straw buyer’s name goes on the mortgage, but someone else is behind the scenes.

They may even offer thousands of dollars to make it seem like a great deal—but if things go wrong (and they usually do), the straw buyer is the one left legally and financially responsible. These schemes are sometimes used by criminals running illegal operations like grow-ops or drug labs to secure properties without drawing attention.

Who Pays the Price?

In cases of mortgage fraud, it’s usually lenders who suffer the financial loss. Canadian courts have ruled that banks must verify property ownership before issuing mortgages. If fraud occurs, courts have sided with rightful homeowners and placed the burden on the financial institutions.

But don’t assume that protects you entirely—it’s still essential to be vigilant throughout the home buying process.

Title Fraud: The Silent Threat to Homeowners

Unlike mortgage fraud, title fraud hurts homeowners directly. Here’s how it works:

A fraudster steals your identity and uses forged documents to transfer your home title into their name. Then, they take out a mortgage on your property and vanish with the cash—leaving you with the debt and a potential foreclosure notice.

Scary? Absolutely. But preventable.

How to Protect Yourself

Use these tips to stay one step ahead of fraud:

• Always view properties in person before making an offer.

• Compare property listings to ensure prices match market value.

• Work only with licensed real estate professionals.

• Avoid agents or brokers with a personal financial interest in the deal.

• Request a historical title search from your local land registry.

• Include a professional appraisal clause in your purchase agreement.

• Schedule a home inspection—even if the home looks “move-in ready.”

• Ask for receipts if recent renovations have been done.

• Make deposits that are held in trust (never directly to individuals).

• Strongly consider title insurance—it’s one of the best ways to protect your home from title fraud.

  
  

Final Thoughts from Ezyloan & Mortgages

Buying a home should feel exciting—not stressful or uncertain. At Ezyloan & Mortgages, we believe informed homeowners are empowered homeowners. Always trust your instincts. If something feels off, speak up, ask questions, and don’t move forward until everything checks out.

Need guidance or a second opinion on a property or mortgage deal? Our team is always here to help. Let’s keep your dream home safe—together.