The Edmonton Real Estate Blog

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Friday, November 18, 2005

Private Sales and Fraud

Before you read this article from the Real Estate magazine you should be aware that mortgage fraud is a very serious matter in Alberta. So much so that in a province where every mortgare used to be assumable that is no longer the case. The banks led by the Alberta Treasurey branch have begun to enforce the "due on sale" clause that has always been there but never enforced. There are all manners and forms mortgage fraud so be aware and protect your identity. We are very aware of the mortgage fraud issue (see resume online at http://www.edmonton-homes.ca/aboutUs.asp ). We will protect you privacy and identity. The second article following is about record fraud activity from the Edmonton Journal on October 25th 2005.

Criminals have found a new application for identity theft – real estate title fraud – and the Greater Toronto Area is at the centre of this growing criminal activity, according to industry experts at a recent real estate fraud summit in Oakville, ON. Susan Leslie, VP claims and underwriting for First Canadian Title says, “Nine times out of 10, we see fraud cases arising out of private purchase and sale agreements.” “In 2000, real estate title fraud accounted for 6% of total claims,” says Leslie. “This number grew to 14% in 2002 and 36% last year. Real estate fraud now represents our single largest claims category. We have been forced to understand the warning signs and are working hard to do our part in educating the industry of the dangers.”

Mortgage fraud losses soar in US this year – Edmonton Journal, October 25, 2005

Reported losses on mortgage fraud more than doubled to $1.014 billion so far in 2005, making the category one of the fastest-growing types of white-collar crime in the US, according to the FBI. Mortgage fraud has surged as the boom in US housing encouraged criminals, Derek Siegle, assistant chief of the financial crimes section of the FBI, said at a panel discussion of the Mortgage Bankers Association in Orlando, Florida. The ease of access to mortgage money has made it possible for more criminals to defraud lenders, he said. Mortgage products such as loans that require no documentation or income verification have made the industry ripe for fraud, he said. The FBI this year has 22,000 reports of suspicious activity related to mortgages, up from about 17,000 in 2004, he said. Popular types of mortgage fraud include “flipping,” in which a buyer purchases a home, obtains an inflated appraisal, and sells it at a profit, he said.

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