Showing posts tagged with: Claims

Get Maximum Coverage with Title Insurance

10Dec

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

16Nov

Claim Story – $450,000 Paid in Real Estate Fraud

by adminClaims

Claim Story – $450,000 Paid in Real Estate Fraud

James and Emma used a mortgage broker, Gary, to purchase their first home. Gary had saved their information and used it to impersonate James to obtain a new mortgage from Tom, a private lender. Gary negotiated for six months of prepayments so that it wouldn’t go into default right away. While James and Emma had no idea that a mortgage was issued on their property, Gary took off with the money and left the country.

When James and Emma received a notice from Tom that a mortgage on their property was in foreclosure, they were shocked and had no idea they had been a victim of real estate fraud. Luckily, Tom was covered and was paid the entire amount of approximately $450,000 by Chicago Title. We strongly believe Gary had connections with organized crime.

While you may be covered under Title Insurance for your transactions, it is essential to be vigilant against real estate fraud. Even though you get paid for the losses incurred in a particular transaction, you still end up suffering other consequences that cannot be covered by insurance – lost investment opportunities, financial strain, loss of reputation in the industry, etc. We encourage you to keep your guard up and avoid situations that can result in such consequences.

Please note that coverage for a matter is based on the specific facts of the claim and pursuant to the terms and conditions of the particular policy issued for the transaction.

15Nov

Fraud claims and tips to prevent fraud

by Kerry MalcolmFraud

Fraud claims and tips to prevent fraud

Chicago Title takes fraud seriously, and as your partners in the fight against fraud, below are some fraud claims that we have received in the past and some helpful tips to prevent fraud.

The client was out of $200,000 when a firm’s email account was hacked, and it acted on a fraudulent request to redirect funds!

We strongly recommend that you:

Check email addresses on all material correspondence and match to the exact trusted email given in the client’s onboarding.
DO NOT accept an email to re-direct funds without the Law firm first making a call to a trusted phone number for the borrower.
Get verbal confirmation of specific details for the redirection of funds and ensure your lender is on side.

A lady refinanced her sister’s house for $250,000, and the money was lost! It turned out to be a case of identity theft!

A simple check of a government-issued ID is not enough to keep yourself from being embroiled in a fraud case.
Before investing your precious time in a file for a non-client, authenticate their identity with Chicago Title’s Identity Verification Service.

An innocent business owner is embroiled in a $1,500,000 mortgage fraud. The law firm is under investigation for its business practices as fraudsters preyed on the firm’s lack of attention to detail and weak security measures.

We strongly recommend that you:

Change your password monthly.
Utilize two-step authentication services for an extra layer of protection.

Over a million dollars gone in a fraudulent sale! How confident are you in handing over a million dollars to a non-client who has come to you to act on the sale of their home, which is mortgage free? The cost of being drawn into a fraud is your time and self-confidence.

We strongly recommend that you:

Do not trust someone just because your client refers them to you.
Use Chicago Title’s ID verification service when acting for a non-client.

A firm redirected $700,000 into a fraudster’s account instead of the homeowner’s account because of a phishing attack. The law clerk clicked on an email link which download spyware onto the firm’s computer.

We strongly recommend that you:

Check your junk mail daily and investigate why items are there.
Use two-step authentication to improve your security.
Verify the sender’s email address and do not click on links or attachments in unsolicited emails.

Additional Useful resources:

31Aug

Chicago Title Paid $2.5M Insurance Claim for Corporate Fraud

by adminClaims

Chicago Title Paid $2.5M Insurance Claim for Corporate Fraud

In late 2020, an Ontario numbered corporation realized they had been a victim of corporate fraud when they discovered a private mortgage worth $2,500,000 was registered on the title of their commercial property and received a registered mail notice saying that their payments were in arrears.

Unbeknownst to the true corporate owner, a fraudster hi-jacked the corporation’s identity changing the records to show an innocent third party was the company’s sole director. The fraudster arranged for an equity take-out with a private lender. An innocent third party’s valid driver’s license and social insurance card were presented to the lender as identification. Note that a social insurance card is not an acceptable ID in a loan transaction. These pieces of identification contained the innocent’s true information, but the fraudster’s driver’s license photo was that of the driver. The police confirmed that the third person was not involved but declared a victim of identity theft.

The insured mortgage was found fraudulent and deleted from Title by the courts. Chicago Title paid the private lender’s claim of $2,500,000 plus legal fees, and the fraudster absconded with the funds. Since this claim, Chicago Title has tightened underwriting requirements, including a mandatory biometric identity authentication process, and is lobbying the government to increase the security in making changes in corporate records.

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

11Jan

Identity Theft: A Homeowner’s Nightmare

by Kerry MalcolmResidential

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.

24Sep

A Builder’s Oversight Almost Cost the Sale

by Kerry MalcolmResidential

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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