In recent days some disturbing events have occurred to clients of my brokerage and I am sure others in the city and I would like to pass on this info so that you all make efforts to protect your investments.

Clients recently discovered that a criminal had forged their identify and drew out mortgages against their existing homes without their knowledge. In such cases the current home has either a small mortgage compared to the value of the home or no mortgage at all. In situations like this, people don’t often know this has happened until they apply for new credit, try to sell their homes or receive a nasty non-payment letter from a financial institution. This is a very serious mortgage fraud issue.

How to protect yourself:

  1. Check your credit once a year. The cost is around $15.00 and it is a soft hit on your credit bureau so it does not affect your credit. Also you can set up for auto alerts so it updates you instantly when something is changing on your credit. This could be a good up front warning so you know if someone is acting outside of your knowledge.
  2. For low Loan to value mortgages or property ownership where there is no mortgage, set up a Line of Credit to 80% Loan to Value. Although you do have a registered mortgage on your property if you don’t access any money you don’t get charged any interest. This will prevent fraudsters or criminals from accessing money on top of that and will deter people when they see something already registered on property. Also it is a great product to have in place in case of investment needs, home re-model, or emergency spending requirements.
  3. Discuss options with your lawyer. Perhaps registering a caveat that will prevent a lender from going on there and putting a mortgage on there. This could be an alternative solution to registering a Line of Credit if it is not needed.

Mortgage fraud has been in the news recently but it seems people often associate mortgage fraud to the process of buying and selling. This does happen as well and working with professionals such as lawyers, realtors, home inspectors, mortgage brokers (and other financial advisors) and document review companies (for condominiums) can help protect you in such cases.

Please do protect yourself and take precautions such as shredding any personal documents, limiting the sharing of your personal information and do check your paperwork, financial statements and credit on a regular basis.

If you have any questions do not hesitate to contact me and/or seek the advice of your financial advisor to help you.