Viewing posts categorised under: Residential
Fraud Discussion
08Jul
Don’t stop the discussion around fraud
Residential

March being the Fraud Prevention Month, always contains a flurry of social media postings of articles and stories around Fraud. It is an excellent way for us to know what fraudsters are doing out in the market and be aware of ways to prevent ourselves from defraud. But with the end of March, it doesn’t mean we can put away our worries for another year. Fraud Prevention Month ends in March, not Fraud. The fraudsters are out there year round and getting increasingly sophisticated in their frauds. It is imperative that we remain vigilant year round.

Title insurance is essential but is not a complete answer
Title insurance is one excellent way to protect yourself against fraud. While there isn’t coverage for financial fraud, fraud against title or impersonation of a borrower is covered. However, when someone pretending to be the owner of a property and is able to get access (often because there is a renter, there is construction going on at the property or long absences of the homeowner) lenders can be duped – Title insurance is not a complete answer.

You can’t be willfully blind to the information that you are getting from your borrowers to ensure that they are who they say they are. Your lawyer or notary needs to be checking IDs carefully to ensure it is legitimate and you as a lender need to be asking questions and doing credit checks to ensure the person who says they are the owner knows the information that the true owner of the property knows. Companies like Equifax and TransUnion have services that can ask questions of your borrower to ensure they know bank accounts, credit card and other information about the true owner. If they can’t answer those basic questions, you don’t want to lend to them, with or without Title insurance. Nowadays, Title insurance companies are now doing checks on some of these borrowers and I believe there should be increasing checks that you and we should be conducting.

Fraud is on the rise and you need to be cautious
US Title insurance companies are seeing rapidly increasing amounts of frauds being perpetrated. Increasingly, fraudsters are taking control of lawyers, lenders, borrowers emails and redirecting funds. They are getting real ID from provincial agencies by producing information about the owner, at some level, even these checks against IDs are not foolproof. We don’t need to become paranoid and freeze up the whole market but we need to be aware and if it smells foul, there is probably something wrong with the deal. You need to run from it or at least do more due diligence before signing over those funds.

With or without title insurance, no one wants or needs to be embroiled in a fraud mess trying to prove what information all parties had or provided and who these people truly were. While Spring brings the hope of sun, flowers and being outdoors for a change, don’t take your eyes off the game. We can work together and beat these criminals; we just need to work together as a team to do so.

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laneway access
29Mar
Back-alley issue
Residential

Back-alley issue

We were preparing title insurance for the sale of commercial property when our title search came back with an unusual problem. The property, in a major city, had laneways attached to it, but no record of if those laneways belonged to the property or not. Without clear ownership, a third party could come in and block access to it.

The vendors had always used the laneways when they owned the property, but the purchasers were worried. They requisitioned the vendor’s lawyer to solve the issue by close of sale, and the vendors were feeling the pinch of all the work and cost needed to get it fixed.

But one of our experienced underwriters spoke with the vendors, and got them to make a declaration that they’d always been able to use the laneways. We used that to create a custom endorsement to protect the purchasers if someone ever tried to restrict their use of the laneway.

Thanks to our customized coverage, the deal closed on time, with both sides saving a bundle. That’s one of the great advantages of having people on the ground who know the area. Custom problems need custom solutions, which are exactly what CTIC provides.

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11Jan
Identity Theft: A Homeowner’s Nightmare
Residential

Identity Theft: A Homeowner’s Nightmare

When Ayako got the first call from the bank, she thought it was a prank. They were threatening to take her home if she didn’t make her mortgage payments. But she had lived there for over 10 years, and had been making all her payments on time. After several more calls, she decided to investigate.

She discovered to her horror a second mortgage on her home she had never taken out. A thief had stolen her identity and put a $320,000 mortgage on her home, made payments for a year and then stopped. By the time Ayako put everything together, the bank had already served her a foreclosure suit.

But Ayako’s lawyer had recommended CTIC’s title insurance when she had bought her house. We paid the legal fees, had the bank dismiss the lawsuit and had them remove the fraudulent mortgage from Ayako’s house. Luckily for the bank, they had title insurance too, so they recovered their losses as well.

Nightmare stories like Ayako’s come up every year, but they only have happy endings with the security title insurance provides. Thanks to her lawyer’s understanding of that protection, it was a nightmare she was able to wake up from.

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24Sep
Protecting the Elderly from Financial Fraud
Residential

Protecting the Elderly from Financial Fraud

Jack came to Faye’s law office looking to refinance his elderly father’s mortgage. When Faye asked him further, Jack presented a homemade power of attourney naming himself as his father’s representative. Suspicious, Faye contacted Jack’s father, who said he was confused, or just deferred questions to Jack. But when she asked him if he understood his son was taking out a loan against his house and he answered “No,” Faye refused to act in the transaction.

Real estate lawyers play a real part in protecting the elderly from being taken advantage of, even by their own families. Consider these best practices at your law practice:

  • Never lose sight of who you represent. If your client’s child or even spouse does all the talking, politely ask them to step out for a moment. Your client may feel more empowered to speak up one-to-one.
  • Bring your own translator. Be wary of family or caregivers translating for your elderly client. Have at least one meeting with a third-party translator to make sure your client can really understand and consent.
  • Verify power of attourney. Never take documents at face value and always make sure the power of attourney is valid and not being abused.
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24Sep
A Builder’s Oversight Almost Cost the Sale
Residential

A Builder’s Oversight Almost Cost the Sale

It started with a call from Arpan. He was a lawyer and his clients were selling their house, which they had bought new from a builder back in the 80s. In their subdivision, the houses were spaced so closely together that to do any maintenance work on the eavestrough or roof, the homeowner had to access their neighbour’s backyard.

This comes up surprisingly often. Normally, the builder registers a maintenance easement to provide access to the other property. But it turned out the builder had forgotten to, and Arpan’s clients were in a bind. The purchasers of their home were demanding they get the easement themselves, a long process that would take time Arpan and his clients didn’t have.

Arpan’s clients could provide a declaration they hadn’t had trouble accessing the neighbour’s property since they’d moved in. That was enough for us, and we got to work. CTIC provided full coverage to the purchaser’s lender; Identified Risk Endorsement to the purchasers themselves, in case the neighbour ever tried to deny access; and marketability coverage on the title, so the protection passes to whoever buys the home next as well. Thanks to that security, the deal went through without a hitch.

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