Financial Safety with EZY Loans: Understanding Mortgage and Title Fraud

In an era where identity theft and financial scams are increasingly common, homeowners face another threat: mortgage and title fraud. These crimes can lead to significant financial loss and stress if you're not aware of the warning signs.

Mortgage fraud typically involves manipulating property values or documents to secure a larger loan. Fraudsters may inflate a home's price through multiple sales or falsify details on mortgage applications.

Beware of the risk factors:

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

• You're encouraged to provide false information on a mortgage application.

• Important sections of your application are left blank for someone else to fill in.

• A seller discourages you from inspecting the property.

• You’re offered a rebate on closing that isn’t disclosed to the lender.

Understanding "Straw Buyer" Schemes

A common form of mortgage fraud involves a "straw buyer," someone with good credit who is recruited to apply for a mortgage on behalf of another person. The straw buyer is often promised a cash reward for lending their identity. This practice can lead to legal trouble and financial damage for everyone involved.

Such schemes are sometimes linked to other criminal activities, like illegal drug operations, making it even more critical to avoid participating in suspicious transactions.

Impact on Lenders and Homeowners

While lenders often bear the financial loss in mortgage fraud cases, homeowners are most at risk when it comes to title fraud. Canadian courts have ruled that lenders must verify the legitimacy of mortgage transactions, but homeowners can still face complications if their title is compromised.

What is Title Fraud?

Title fraud involves identity theft, where a criminal uses fake identification to transfer ownership of your property to themselves. They then secure a new mortgage against the property, collect the loan, and disappear—leaving you to face the foreclosure process.

Unfortunately, the first sign of title fraud usually comes when your lender notifies you of missed payments. To protect yourself, consider the following precautions:

• Always view the property in person before purchasing.

• Compare listings in the area to ensure the asking price is reasonable.

• Work with licensed real estate agents and mortgage brokers.

• Request a copy of the land title and conduct a historical title search.

• Include an appraisal clause in your purchase agreement.

• Insist on a home inspection to avoid buying a property previously used for illegal activities.

• Ask for receipts for recent renovations.

• Ensure your deposit is held "in trust."

• Consider purchasing title insurance.

Mortgage and title fraud can have devastating financial consequences, but awareness is your best defense. Trust your instincts—if something feels off, investigate further before proceeding.

At Ezy Loan, we’re committed to helping you navigate the home-buying process safely and confidently. Reach out to our team for guidance and support every step of the way.