How You Can Protect Yourself from Real Estate Fraud
While one of the less common types of fraud, real estate fraud can be very serious, and in the worst circumstances it can lead to you losing your home – not something any homeowner wants to be faced with.
What Is Real Estate Fraud?
There are two common types of real estate fraud that you should be aware of - title fraud and foreclosure fraud:
1. Title Fraud
Title fraud is, in many ways, an extension of identity theft. When you purchase a home, you also purchase the title to that home, which is part of the reason that you involve lawyers in the closing process. When someone commits title fraud, they use another identity to purchase a home and obtain a mortgage and the home’s title with that false identity.
A criminal can also obtain a second mortgage on a home you already own and pocket the money, leaving you on the hook for a much larger mortgage payment.
2. Foreclosure Fraud
Foreclosure occurs when the bank takes ownership of your home in an effort to recoup the cost of unpaid mortgage payments that you owe them.
Foreclosure fraud occurs when a criminal offers you the opportunity to consolidate all your payments or credits with them into one simple payment. In exchange, you sign over the title of your home to them. They then may simply keep the payments, allowing your mortgage to go even further into arears, or could even turn around and sell your home, pocketing the profit.
Read More: Fraud Prevention Month – How To Avoid Becoming A Victim
So How Can You Protect Yourself from Real Estate Fraud?
Ultimately, most forms of real estate fraud are an extension of identity theft, so the most important way to protect yourself from real estate fraud is to protect yourself from identity theft.
Criminals can gain access to your personal information, and ultimately steal your identity, through a variety of methods, including dumpster diving, going through your mail, phishing scams, or hacking into your personal computer.
To prevent real estate fraud, many times it is simply a case of being vigilant:
- Contact your lender if you have any problems with your mortgage payments, especially if they are behind
- If you are planning to sign the title of your home over to someone else, ensure you are involving a lawyer who you know and trust
- Consider title insurance
- Keep a close eye on your credit report. You can obtain these for free at any time.
Real estate fraud can be scary, but simply staying vigilant can go a long way.
Related Articles
Experts Cautiously Optimistic About Canadian Real Estate Market In 2015
Buying Or Selling? Outlining The 2015 Canadian Real Estate Trends
Must Read Advice For Simplifying The First Time Home Buying Process