Viewing posts categorised under: Residential

23Jun

Beware! Condo Owner Impersonations are on the Rise!

BEWARE! CONDO OWNER IMPERSONATIONS ARE ON THE RISE!

In a shifting real estate market, criminals are always trying to take advantage and become increasingly sophisticated with their real estate scams, especially condo owner impersonations.

A fraudster impersonated the owner of a unit at the Montreal Canadians Tower, a condominium property in downtown Montreal, Quebec. The fraudster borrowed an amount of $358,995.98 CAD from a Private Lender, which was guaranteed by a first mortgage.

As part of this transaction, the Insured obtained a lender’s policy underwritten by Chicago Title Insurance Company. The fraudster provided a false ID to the notary who transacted the mortgage.

Chicago Title paid $358,995.98 to the insured lender and an additional $31,032.00 CAD in legal fees. The homeowner regained their unencumbered condo unit. Without title insurance, the end of the story would have been very different.

Stay one step ahead of fraudsters

At some point in your life, you will encounter fraudulent activities. It’s not a matter of if; it is only a matter of when. Fraudsters are an increasing threat worldwide, and it is not restricted to just the real estate industry. What is worrisome is that the criminals have improved their tactics. This is why you need to have a good understanding of how they work and how to spot fraud before it’s too late.

The good news? At Chicago Title, we are proactive at spotting fraud warning signs and at protecting our clients. We have made it our company mission to create processes and safeguard protocols to ensure a fair and accurate real estate transaction each time.

Choose wisely

We continue to increase awareness of fraud trends through educational resources that help lawyers, notaries, their staff and clients. Choose wisely and call us now for your free consultation.

We are here to help. For more information, contact your Regional Manager today!

CTIC.ca

13Jun

Understanding Title Insurance

by adminCommercial

Understanding Title Insurance

Buying a home can be an emotional, exciting journey and probably the single largest investment you could make in your life. Understanding title insurance can help you protect your property’s title.

Do note that when buying a home, many hidden issues may spring up after you purchase it. This is why it is important to get an owner’s title insurance policy as it protects you from legal title discrepancies and other fraud issues. Here are other reasons why understanding title insurance is vital to protecting your home.

Everyone has a checklist of things they look for when buying a house. This could include a quiet tree-lined street, a neighbourhood with good schools and others. These are all important things to consider but what about the property’s history?

Did you know there could be issues like pre-existing liens, easements, zoning violations, outstanding work orders, forged identity and more? These issues could cause confusion over who has right to the property. And the last thing you want as a homeowner is a big confusion that puts your property in jeopardy.

Here is where title insurance comes in when you buy or refinance a home. Title insurance confirms there’s no dispute over who has rights to the property.

Peace of mind with a one-time fee!

Unlike homeowners’ insurance where you pay a monthly premium, title insurance only requires a one-time fee to protect you and your property. Title insurance gives you and your client peace of mind that any disputes or restrictions that may arise are resolved or known.

Regular title insurance covers you against losses from unknown title defects that could impact your property ownership, title fraud, unforeseen mistakes in public records and surveys, issues regarding encroachment and more.

Title insurance from Chicago Title can provide peace of mind with the knowledge that your client’s interests are fully protected. To learn more get in touch with us at Chicago Title today.

17May

5 Things to Consider When Buying a Cottage + Bonus Tip

by adminIndustry News

5 Things to Consider When Buying a Cottage + Bonus Tip

Now that the weather is warming up, cottage season is upon us. Vacation properties have become a red hot market driven by the allure of short-term rental investment properties to those who are looking for a quiet place to relax outside of the city. Before dipping your toes into the market, or into the lake, there are 5 things you must consider to protect yourself, and your dream investment from becoming a nightmare:

1. Property and Surroundings

Start the process by visual inspection of the property. Look for things like missing shingles, holes or damage on the roof, cracks in the foundation, and damage to porch screens, decks or chimneys. If the property is on a lake, don’t forget to check docks, lifts and boathouses.

2. Water Supply

A reliable water supply is critical. Ensuring that the plumbing is in order and testing water potability, gives you the peace of mind that you will have a reliable and safe water supply for the cottage season.

3. Septic System

Take note of potentially strong odours, water pools or damp spots around the septic tank. This also includes gurgling sounds in the plumbing system and slow draining bathtubs, showers and sinks. The last thing you want to be surprised with is water or sewage coming up your toilets, drains and sinks. Pay close attention and engage a professional if you see any red flags.

4. Mold or Mildew

Check for mold and mildew around the sills. Remember that bathrooms are often a hot spot for growth as the conditions often provide the perfect environment for mold and mildew to flourish. If you find any mold or mildew be sure to never touch or disturb it, as even a small amount may be a health hazard.

5. Ease of Access:

If you intend to make regular use of your vacation property, look for one with unencumbered access by road. Remember, Cottages that offer access by water only, may cost less, but you must also factor in the added expenses of operating, parking and protecting your boat. Being isolated by water also provides yet another opportunity for potential intruders to go unnoticed.

Bonus Tip

Lastly and most importantly, remember that title insurance coverage is one of the greatest tools you have to protect against potential losses arising from issues like encroachment, zoning violations, fraud and more.

That’s it. By exercising the precautions above and ensuring you have protected your investment with a title insurance policy you can ensure that your dream property does not become your worst nightmare. Click on the link to learn more about our seasonal property endorsement.

Chicago Title offers comprehensive coverage for your cottage. Contact your lawyer for more information on our coverage today!

CTIC.ca

04May

Avoid Nasty Surprises: Buy the correct insurance policy

by adminClaims

Avoid Nasty Surprises: Buy the correct insurance policy

Sylvia and Jay received an inheritance that finally allowed them to get into the Ontario housing market. They purchased a legal duplex with the intention of renting out the second unit, to assist with cash flow.

Jay and Sylvia’s law firm overlooked the multi-unit property type on the agreement of purchase/sale and failed to complete the requisite off-title searches. Three months after their closing, the new homeowners received a notice from the city. An outstanding municipal work order stated that the electrical work in the secondary unit was in violation of municipal building and electrical codes. The city issued an order to comply.

The Insureds submitted a claim to Chicago Title but unfortunately, it was denied. Their single-family dwelling policy did not afford coverage for outstanding works on a multi-unit property.

This nasty surprise could have been avoided had the law firm recognized the property type and conducted the required off title searches. An abatement in price or some sort of corrective action might have been negotiated before the sale was finalized.

Make certain you understand your clients’ future use of the property they are buying so there are no nasty surprises. Off title searches are required when ordering a multi-unit policy. See Chicago Title’s Resource Library for Search Guidelines. Off title searches add extra cost to the closing and give the purchaser a chance to take corrective action before it’s too late.

ORDER THE CORRECT TITLE INSURANCE POLICY FOR YOUR PROPERTY TYPE

When placing an order for a title insurance policy, it is important to select the correct property type in your conveyancing platform so that the Insured gets the correct coverage.

One of the most common errors that we see is a single-family dwelling policy ordered for a property with a basement apartment or multi-unit residence. Avoid nasty surprises and make sure to select the correct property type.

For more information on ordering the right policy for a property containing more than one unit, please refer to our information sheet.

Get Maximum Coverage with Title Insurance

10Dec

Get Maximum Coverage with a Title Insurance Policy

by adminResidential

Get Maximum Coverage with a Title Insurance Policy

The insureds bought a home in Calgary, and their closing date was July 5. The insureds had maximum coverage with a title insurance policy.

The deed got sent immediately to be registered. Due to delays at the land registry office, the deed got officially registered on July 19. However, between July 5 and July 19, a judgment creditor of the seller registered a Writ of Enforcement against the Property. Which effectively constituted a lien on the title that took priority over the insured owners and their lender.

Maximum Coverage with the Chicago Title Solution

Since the insured had maximum coverage with a full title insurance policy, Chicago Title paid the amount of the judgment against the seller. And they obtained a discharge of the writ from the title for $26,643.75. With a title insurance policy, your clients are covered from such title defects, but a GAP-only policy does not cover title defects.

Watch the video to learn more about the differences between Title insurance and Gap-only coverage

17May

Mortgage Fraud: Fake Power of Attorney

by Kerry MalcolmClaims

Mortgage Fraud: Fake Power of Attorney

Fake Powers of Attorney (POA) have been linked to many fraud claims. Be on guard if your client asks you to close using a Power of Attorney. Here is the story of Julian, a private lender, who was a victim of a similar fraud.

Susan* made her husband, Robert*, a Donor in a Power of Attorney (POA) when they decided to purchase a house. A few years later, the relationship ended and Robert moved out. He used the old Power of Attorney which was expired and altered it to make it appear valid in order to get a mortgage on his wife’s house. Robert approached Julian*, a private lender, to get the mortgage with this fake Power of Attorney and didn’t disclose the fact that he was not living with his wife anymore. Julian believed him and issued the mortgage without consulting with Susan. When he learned that the mortgage was issued without Susan’s knowledge or consent, he knew he had been a victim of fraud, so he contacted Chicago Title. While the case is still under litigation, Julian is happy he has a Lender’s policy with Chicago Title to cover his losses.

At Chicago Title we understand that your house is not just a house; it is your most important asset; it is where you build your dreams and create priceless memories, and it needs to be protected. For a competitive, one-time premium, an owner’s title insurance policy protects the purchaser or the existing owner from fraud and title defects.

* Names and identifying details have been changed to protect the identity of the involved parties

10Jun

Avoiding Fraud During the Pandemic

by Kerry MalcolmResidential

Avoiding Fraud During the Pandemic

In times of uncertainty, we know from experience that fraudsters ramp up their activities. In these uncertain times of COVID-19, we need to increase our vigilance.

Some firms use the driver’s license validation service offered by the Ministry of Transportation. We need to be careful not to take too much confidence in the outcome. The MTO search lets you know that you have a valid driver’s license number. It does not tell you who that person is.

When falsifying a driver’s license, fraudsters may redress just the front of the driver’s license and leave the back of the license unchanged. Compare information on both sides of the driver’s license. Make sure the information on the back of the license matches the front. In Ontario, for example, a unique identifier number is printed on the front, and that same number is on the back of the driver’s license.

With many law firms overseeing the signing of documents through virtual means, these transactions are deemed to be high risk. Governing bodies tell us to take extra steps but may fall short of telling us what those steps would be. One option available to you is Chicago Title’s ID verification service.

ID Verification Service will check the identity of the client (purchaser, borrower) against a variety of data sources to help validate the identity of the person. The knowledge-based authentication process uses information that should only be known by the client.

Let’s work together to reduce identity fraud and add an additional level of security to your real estate transactions.

Contact your Regional Manager for more information.

12Mar

Peace of mind with a suitable Title Insurance Policy

by Kerry MalcolmResidential

Peace of mind with a suitable Title Insurance Policy

Title insurance is the cheapest and best insurance you will ever buy. Period. Seriously. Okay, I know that I am biased given I work for Chicago Title Insurance Company Canada, but a big part of why I work here is that I believe in the product. I know all of the arguments about insurance and how expensive it is and when one tries to make a claim, there are issues. I get it. The industry doesn’t have the best reputation – although, on that front I have to tell you the last two times I dealt with other insurance companies (Car accident and Life insurance policy – not mine thankfully), the service and speed was stellar. In any event, Title insurance is different. Title insurance is the cheapest insurance you will ever buy because it is a 1 TIME PREMIUM. That’s right. You pay the premium, which across Canada the average premium is $400 for a homeowner (GTA is higher because values are much higher). One only pays that premium once to cover the entire life of a mortgage (which includes any assignments to another lender) or the length of time one owns the property. So, if one buys a house today and owns it for 50 years, the coverage will still apply. Luckily for title insurance companies, Canadians on average own their homes around 5 years, so we actually get to insure properties more than once.

So, what is title insurance policy and what does it cover? Title insurance covers a homeowner for a myraid of issues relating to a property that home insurance can’t cover for and that a lawyer/clerk/notary can’t protect a homeowner from. It covers matters such as fraud and forgery, survey issues, zoning, work orders and permit issues where the municipality forces a homeowner to fix such problems. It covers the policyholder if there are any actual challenges to the “title” or ownership of your property (or the validity of a mortgage on the property in case of a lender policy) but it goes well beyond that to cover many other issues. So, what happens if a client buys a house and their neighbor subsequently complains that the client’s garage is 3 feet on to her property? Well, title insurance looks at the issue, tries to get the neighbor to be reasonable and settle but if she refuses and wants to be “that” nasty neighbor we always hear about, the title insurer will pay to have the garage moved or the offending portion moved off of the neighbor’s property. Title insurers see all sorts of claims around building permits, unpaid taxes, construction liens, and sadly and rapidly increasing fraud and forgery where someone fraudulently discharges and/or places a new mortgage on title to a property they don’t own. This causes a total mess for the homeowners and the lenders involved and sorting out the mess can be very costly. The beauty of title insurance, in this scenario, is that the title insurer pays the legal fees to sort it out and if the lender ultimately loses priority or the validity of its mortgage or property, title insurer pays the homeowner or the lender the loss without deducting the legal fees incurred to remedy the situation.

While no one loves insurance, as one pays for it and usually don’t need it, its value is often appreciated when there is possibility of a material loss, but the homeowner doesn’t have the right insurance in place. Title insurance is such a simple, inexpensive and invaluable insurance to have that any mortgage professional can categorically and without hesitation recommend it to a homeowner for protection against perils described above and for peace of mind.

Written by John Rider, Senior Vice President, Retail and Commercial Title Insurance, Chicago Title Insurance Company Canada policy

Published by Private Matters Today. Click here to read the published article on Private Matters.

08Jul

Don’t stop the discussions around fraud

by Kerry MalcolmResidential

Don’t stop the discussions around fraud

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.

29Mar

Back-alley issue

by Kerry MalcolmResidential

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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