Showing posts tagged with: Residential
Avenant Augmentation du Montant de la police. Protection accrue contre la fraude. 
08Nov
Increased Policy Amount Endorsement: Increased Protection against Fraud
Fraud

Increased Policy Amount Endorsement: Increased Protection against Fraud

 

In March this year, we received a call from Phillip and Hailey. Their Etobicoke home was sold without their permission!

The couple has been working overseas, and their home was left vacant. Last Christmas, they decided to lease it and make some additional income instead of leaving it empty. They hired a property manager, and the house was leased on Feb. 1st and unexpectedly contracted for sale, closing on Feb. 28.

Phillip sensed a problem when the property manager asked him to pay arrears owed on the property. He asked the property manager to collect them from the tenant. The property manager was shocked to discover that the house was not occupied by the tenant they had contracted but by another person. To his surprise, the new “Owner” had also renovated the property.

Phillip and Hailey had become victims of Vendor Impersonation Fraud! The house they had purchased in 2013 for $665,000 sold for $1,700,000 in 2022, and fraudsters had walked away with $1.4 million. Previously fraudsters went after homes that were unencumbered, but not anymore. Phillips and Hailey had a secured line of credit balance on the property that did not deter the fraudsters.

Phillip is worried that his 200% inflationary coverage limitation under his title insurance policy isn’t enough. ($665,000 x 200% = $1,330,000). He is underinsured by almost $400,000. He contacted his lawyer to check if he had made a mistake in underinsuring him. To his dismay, that isn’t the case.  Today Chicago Title offers the Increased Policy Amount Endorsement for just this reason!

The meteoric rise in housing prices has made the equity in homes a prime target for fraudsters. These fraudsters try to siphon out this built-up equity by impersonating the true homeowner. They arrange for a mortgage to be placed on the title and disappear with the funds. With Increased Policy Amount Endorsement, you can protect your clients against loss from such fraudulent activities. This additional endorsement provides coverage for the property’s full market value at the time of the claim, less any improvements.

It is available for homeowners & purchasers to provide current market value in the event of a valid claim. Phillip was disappointed he could not buy it back in 2013 but appreciated knowing the peace of mind is available for purchasers today.

It’s a reasonable 10% of the title insurance premium in a purchase transaction. In today’s market, Existing Homeowners may feel underinsured, and The Increased Policy Amount Endorsement is available for them for 20% of the title insurance premium.

Click on the link to allow your client to benefit from this additional residential property coverage. Learn more.

Call your Regional Manager to book an appointment now!

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Working Together to Prevent Fraud
08Nov
Working Together to Prevent Fraud
British Columbia

Working Together to Prevent Fraud

 

Brian and Helen purchased their home in 2013 for $665,000. In 2021, Brian accepted a job transfer out of the country, leaving their home empty. In 2022, their home was listed on the MLS. Three weeks later, it sold and closed for $1.7M. On closing, a $300,000 balance on a secured line of credit was paid off, and fraudsters absconded with $1.4M!

Legal professionals never want their name and firm to be associated with the word Fraud. For years, fraudsters have been getting away with committing fraud against innocent lenders and homeowners. Being embroiled in fraud causes undue stress for all involved and causes insurance premiums to continue to rise. Crimes surround us; we need to work diligently together to prevent fraud!

Because of our well-known expensive real estate, beautiful British Columbia is a prime international target for fraudsters. More real estate transactions increase the likelihood that the borrower or vendor will not be who they say they are.

In 2022, vendor-impersonation frauds have risen to the top as the costliest claims in Canada. How confident are you that people are who they say they are? Fake government-issued ID is very difficult to spot and very easy to get.

A strawman is a person that a criminal mastermind hires to make an appearance at the signing of documents. That individual gives the money received from the sale of a property to the mastermind. Recently, a strawman was arrested with 12 identities in his possession and a ticket out of the country dated 2 weeks from his arrival here.

Consider this the next time you close a real estate transaction:

  1. Are your homeowners exposed? Lenders mandated title insurance, but many BC homeowners have been left uninsured and exposed to loss. Always buy an owner’s policy.
  2. You act for prime real estate fraud targets; nonresidents, investors and owners of vacant homes. What will you do to protect them from vendor impersonation and prevent fraud?
  3. In your engagement letter, make it a requirement that new-to-you clients’ have their identities authenticated by a trusted third-party expert before you invest too much time in the file.
  4. Avoid wiring large amounts of money to new-to-you clients. Issue one paper cheque to the registered owners that way, you have recourse but not when you wire money.
  5. Stay educated on current fraud trends.
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happy credit union day
17Oct
Credit Union Day 2022
Industry News

Credit Union Day 2022

 

Happy International Credit Union Day! Today, as proud partners of credit unions across Canada, we celebrate the credit union movement to empower the financial future of our Canadian communities.

We truly value our partnership with credit unions. We are committed to providing them with innovative products that add value to their members, protect them from losses arising from issues like fraud, title defects and pre-existing liens, and secure their residential and commercial real estate transactions.

At Chicago Title, we are committed to providing you with the best opportunities and support. We are equal partners in your success! Together, let’s help you build a glorious future.

To learn more about how we add value click here.

happy credit union day
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Multi-family endorsement helped a client save over $105,000!
07Sep
Multi-family endorsement helped a client save $105,000!
Claims

Multi-family endorsement helped a client save over $105,000!

 

It’s of utmost importance for lenders and lawyers to ask the right questions when closing a real estate transaction. This helps them ensure the right title insurance coverage for their clients.

For instance, it’s good to know if the property is a duplex, triplex or any type of plex. Does it include basement apartments? Is it a multi-family residence, and so on? If it is the latter, does it require the Multi-Family Endorsement to optimize the coverage afforded under the policy? This is how selecting the correct coverage for a multi-family residence could safeguard the Insureds and validate their claim in the future.

Claim Summary

In July 2018, the Insured acquired the title to their property in Ontario. The Insured was also issued the Owner’s Title Insurance Policy underwritten by the Company.

A year later, they received an Order to Comply from the City related to prior unpermitted construction and renovations resulting from an inspection in May 2019.

The Chicago Title Resolution

Chicago Title determined that the claim fell within the Policy’s Multi-Family Endorsement and accepted the claim. An engineer’s report was ordered, and the company decided to pay the maximum policy amount since there were many things to remedy. Though the policy amount was determined at $90K, the maximum insured amount was $180K. This was because the residential owner contains a standard provision to address the increase in the fair market value of the Land, which compensates an insured owner for a maximum of 200% of the Amount of Insurance for an Actual Loss because of a Covered Risk. Chicago Title obtained an appraisal that valued the property between $95K and $105K. We, therefore, paid the maximum amount of $105K.

Covered Risk

Title insurance protects the insured from losses due to forced removal or remedy existing structures or any part of them – other than boundary walls or fences – because the portion was built without obtaining a required building permit from the proper Governmental Authority.

Title insurance from Chicago Title can provide peace of mind with the knowledge that your client’s interests are fully protected.

To learn more, visit ctic.ca.

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Endorsements further enhance title insurance
07Sep
Endorsements further enhance title insurance coverage!
Claims

Endorsements further enhance title insurance coverage!

 

Title insurance policies for owners and lenders address many real estate closing needs. However, some property owners or lenders may require a unique endorsement to the standard title insurance policy to cover an identified risk. An endorsement helps so the transaction can close on time and provide coverage should the identified risk require future remedy.

Claim Summary:

In 2017, the Insured purchased a brand-new home from a builder in Quebec. Chicago Title issued an owner’s policy that included an Identified Risk – Enforced Removal Endorsement to cover the insured should the owner of the adjacent property require the enforced removal of part of the interlocking paving stone driveway encroached onto the neighbouring property.

Two years later, in 2019, the neighbouring property owner sent a letter to the Insured requiring the prompt removal of the interlocking paving stones encroaching onto his property.

The Chicago Title Resolution:

The Company accepted the Insured’s tender of defence. The claim was covered under the Identified Risk – Enforced Removal Endorsement included in the owner’s policy. The issue was settled smoothly, with Chicago Title paying out the amount of $2,299.50 to cover the cost of removing the encroachment.

Title insurance from Chicago Title can provide peace of mind with the knowledge that your client’s interests are fully protected.

To learn more visit ctic.ca.

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Vigilant law firm spots and averts real estate email spoofing in time!
11Aug
Vigilant Law Firm Spots and Averts Real Estate Wire Fraud!
Fraud

Vigilant law firm spots and averts real estate wire fraud!

 

Lawyers who work with real estate clients and wire funds as part of their practice need to be aware of email spoofing frauds that could potentially cost them hundreds of thousands of dollars.

While spoofing (email messages created with fraudulent sender address) affect all types of professionals, real estate lawyers are particularly vulnerable as they handle millions of dollars. Here is a close call shared from clients in the Prairies.

Fraud Summary:

A Manitoba lawyer representing a private lender received a call from the law firm representing the borrower in a private loan transaction. The borrower’s law firm received an email that appeared to be from the lawyer requesting that they advance by wire $9,000 to secure the forthcoming private loan.

The law firm knew something smelled fishy and made a call to confirm the lawyer’s email request. The lawyer denied the demand for the $9,000 wire advance, and upon closer look, the email address of the spoofer was off by one character.

Had the firm wired the $9000, the money would be gone and the loss unrecoverable.

5 Tips to Protect Yourself from Email Spoofing

  • Look out for odd URL links, unusual urgency, strange requests and last-minute changes
  • Always call to confirm payment details as the law firm did in the incident above
  • Check your junk mailbox daily and install antivirus software
  • Regularly change your passwords and use 2 step authentications where possible
  • Be vigilant and examine whether the incoming email has passed authentication processes like DKIM, DMARC and SPF
  • Link to more tips

The Chicago Title Assurance:

Real estate lawyers and notaries are encouraged to contact their Regional Managers at Chicago Title to understand better the fraud types and how to protect themselves and their clients.

To learn more visit ctic.ca.

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How an alert real estate lawyer prevented fraud with a simple phone call
11Aug
How an Alert Real Estate Lawyer Prevented Fraud with a Simple Phone Call
Fraud

How an alert real estate lawyer prevented fraud with a simple phone call

 

Many types of real estate frauds occur in residential and commercial real estate transactions. Some of these can be fairly unassuming and can trip up even an experienced, diligent lawyer.

Here is a fraud incident reported from Saskatchewan (Yes, fraud can happen in the prairies too). It’s an indication of why lawyers should always stay on alert when it comes to protecting their client’s interests.

Fraud Summary:

A lawyer in Saskatchewan was emailed a request to re-direct funds on the day of closing a sale transaction for their client.  The email included a copy of a void cheque sent from their supposed “client.”

Fortunately, the lawyer exercised caution and picked up the phone to confirm this change in direction. As feared, it turned out, her client did not email redirection for the sale proceeds.

Of course, the client was very confused by the call, and in the end, the lawyer was thankful she trusted that little voice in her head that said something was off. She was able to save hundreds of thousands of dollars from falling into the wrong hands.

Extra due diligence is a must when dealing with real estate transactions and any last-minute changes.

The Chicago Title Assurance:

Real estate lawyers and notaries are encouraged to contact their Regional Managers at Chicago Title to understand better the fraud types and how to protect themselves and their clients.

To learn more visit ctic.ca.

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UNDERSTANDING FORCED REMOVAL ENCROACHMENT AND HOW TITLE INSURANCE HELPS
24Jun
Understanding Forced Removal Encroachment and How Title Insurance Helps
Claims

Understanding Forced Removal Encroachment and How Title Insurance Helps

 

After spending months looking at houses, you have finally found your dream house. It meets all your needs and is within your budget. You are excited to proceed only to discover after you have purchased the property that a structure situated on the property is encroaching onto the neighbouring lands!

An encroachment is the projection of the actual building or a portion thereof including any improvements on the lands as of the date you purchased the property onto the land belonging to the adjacent property owner. This can include but is not limited to, a portion of the home, garage, shed or driveway encroaching onto the neighbouring lands.

As a homebuyer, can you proceed with the transaction if you become aware of an encroachment issue before you complete your transaction? Well, the short answer is you should consult with your lawyer/notary who can then liaise with your title insurer to determine whether there is any comfort or coverage available for the known defect. The title insurer will then explain the nature of the limited coverage available if any, and you can make an informed decision while instructing your lawyer/notary on how you wish to proceed.

In some instances, depending on the nature of the encroachment, no coverage may be possible for the issue. With title insurance, you may get a limited form of coverage or be able to close with the known defect, but without coverage. Read the following story to see how title insurance may provide coverage for an encroachment.

 

How Chicago Title Settled the Insured’s Endorsement Claim

An insured purchased a property that had an encroachment onto the neighbouring property. The purchaser was aware of the encroachment and it was noted as a known defect as it did not affect the marketability of the property. So Chicago Title issued an owner’s policy that covered the encroachment to the adjacent property (with an Identified Risk – Enforced Removal Endorsement) owned by the School Board.

Shortly after purchasing the property, the Insured reached out to the School Board to purchase part of the lot or to obtain a servitude to park or servitude for vehicular access.

The School Board sent an email refusing to sell a portion of the lot or to provide any servitude. They advised that they were open to a temporary servitude to allow the Insured to rectify the encroachment of the exterior cladding, the two Hydro-Quebec electrical meters and the two ventilation outlets.

Since the insured had a Chicago Title insurance policy with the Identified Risk – Enforced Removal Endorsement, we settled the claim by paying the cost of rectifying the encroachment.

Title insurance provides coverage from an actual loss suffered by the insured resulting from the forced removal of a structure encroaching on an adjoining property or a public utility easement.

In unique cases like this, the underwriter will consider the possible title insurance endorsements and exclusions from coverage and review the property comprehensively. This includes considering easements and servitudes, standard restrictions, the option to purchase or the right of first refusal and other reservations mentioned in the title commitment. It is important to review the policy issued for actual coverage and exclusions.

Title insurance helps and it’s an essential form of insurance. Chicago Title provides insureds with coverage for any actual loss suffered in relation to matters that are covered under the title insurance policy and are not otherwise excepted or excluded from coverage. For a competitive, one-time premium, an owner’s title insurance policy protects the purchaser or the existing owner from title issues, fraud and other title defects more specifically set out in the title insurance policy.

Title insurance from Chicago Title can help provide peace of mind with the knowledge that your client’s interests are fully protected. For more information, contact your Regional Manager today!

CTIC.ca

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Chicago Title Insurance Solves Swapped Title Problem
24Jun
Chicago Title Insurance Solves Swapped Title Issue
Claims

Chicago Title Insurance Solves Swapped Title Issue

 

Imagine the house you have been living in does not belong to you! This happened to a townhome owner in Ontario recently, but luckily they had Chicago Title Insurance.

The Complication of Swapped Titles

The Insured purchased a new townhome in Brampton directly from the developer. Several years later, they received a letter from a lawyer who represented a neighbour in the townhome development. The letter informed them that the developer had made an error with some of the transfers of the townhomes, theirs included.  Sadly, this meant the legal descriptions for the Insured’s townhome and the neighbour’s townhome got swapped.  In other words, the Insureds had possession of the home they intended to purchase, but the legal description in their deed was that of their neighbour’s home and vice versa.

Resolution by Chicago Title:

Thankfully, the swapped title was not actively causing any loss or damage to our Insured but was causing issues for the neighbour.  This issue would eventually cause a problem for the Insured when they decided to sell or refinance their home. Additionally, without the Insured’s cooperation in resolving the issue, the neighbour would be forced to file a legal action seeking a court order rectifying the legal descriptions.

Chicago Title Claims did not want to take a premature position on the basis that the Insured had not suffered a loss (that could trigger a duty to indemnify) or had not been sued (that could trigger a duty to defend). The Company instead decided to pay the legal and transaction fees involved in facilitating a deed swap between the insured and the neighbour. Fortunately, this resolved the neighbour’s problem and corrected the swapped title issue. Without title insurance, the insured could have suffered a significant legal bill rectifying the situation at a time when they had no time to spare.

Things to Know about Title Insurance:

Title insurance is an essential form of insurance that provides coverage for future claims or losses against the title. For a competitive, one-time premium, an owner’s title insurance policy protects the purchaser or the existing owner from suffering a loss due to swapped title issues, fraud and other title defects.

Title insurance from Chicago Title can provide peace of mind with the knowledge that your client’s interests are fully protected. For more information, contact your Regional Manager today!

CTIC.ca

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Condo owner impersonations a
23Jun
Beware! Condo Owner Impersonations are on the Rise!
Claims

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

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