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TagMortgage Broker

You Might Sell Your Home… And Not Even Know It

Well, it’s happening again. Scammers are coming after innocent homeowners, assuming their identities, and selling their homes on their behalf. It’s disgusting behaviour that’s made even more possible by a precarious housing market. Unfortunately, this isn’t anything new. Scams like this have been happening for decades. The only thing that’s changed is how the fraudsters do it.

In most recent cases, homes were sold by tenants who used fake IDs and job letters to rent the houses. Once they’re in, they assume the identity of the homeowner, take out a mortgage in their name, and use a realtor to list the home.

Nothing a little due diligence couldn’t catch off the bat. If you’re renting a property you own, make sure you do your homework. It could save you a lot of money and headache. Call their employers and ask for personal references. Look them up on Google. Do a little social media search. Ask for bank statements. And most importantly, make sure you get a valid Equifax credit report.

Taking these steps can end this cycle that’s been happening for years. To show you how long scams like this have been around for, here’s an article I wrote years ago. Small details may have changed – but the story is the same at its core.

Since 2006 when I last wrote about this, we have seen some provincial governments step in with laws to help protect unsuspecting homeowners.  You can also purchase title insurance or an alternative method of protection.

A couple of years ago, Toronto police said a woman used a fake ID to get a $300,000 mortgage.  The unsuspecting homeowner only discovered a mortgage had been fraudulently registered on their home when they received mortgage documents in the mail.

This is not a new scam. It’s happened many times in the past. Here’s a big one from 2010 that involved $140 million and hundreds of people. This one was huge. Most are not this big or elaborate.  It’s the smaller ones, like the recent one for $300,000, that are more commonplace.

How It’s Done

At the risk of advocating or promoting fraud, I’ll just share the fine points. A title search is done on a house, usually in mature neighbourhoods where the elderly live and it’s more likely a mortgage will have been paid off. Title searches are cheap and all of that info is public knowledge.

The crooks will then present false ID to a banker or broker and request a mortgage. They will usually get a small mortgage in relation to the value of the house.  Using fake income docs, they will proceed to get the mortgage approved and advanced through a lawyer. The lawyer will verify the ID (if it’s fake, it’s hard to determine) and close the transaction.  The crook walks away with the money. The real homeowner gets a letter requesting their monthly payments from the lender, and now the fun begins.

The unsuspecting homeowner has to go through quite a process to prove their innocence and then has to spend quite a large amount of money on legal fees to get the mortgage removed.  It’s quite a headache. A headache that can be avoided easily.

How To Avoid Mortgage Fraud

It’s easy.  Just register a mortgage on your house. I don’t mean borrow money just for the sake of preventing mortgage fraud.  You can take out a secured line of credit that will be secured by a collateral mortgage charge registered to your home. If you don’t use the line of credit, you pay no interest.  The crooks will see that you have a mortgage charge registered and will most likely leave you alone and go on to the next victim.

To understand more and to find out what your best options are, contact an experienced mortgage broker for advice and consultation. A good broker is always happy to help and offer advice.

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What the New Foreign Buyers Ban Means For You

Now that the dust has settled from the holidays and we’re back into the swing of things, we’re reminded that January 1st, 2023 wasn’t just the first day of the new year; it was also the first day of Canada’s new foreign buyers ban. The ban was passed through parliament last summer and is now officially in place prompting many Canadians to ask, “what does this mean for me?” Unfortunately, the answer isn’t so simple. 

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What To Expect in 2023

Happy new year everyone! I hope everyone reading this took some time to reflect and recharge over the holiday season. There was a lot of negativity swirling around in 2022, and I’m sure a lot of you needed a break from it all. I sure did. It’s easy to get swept up in all of the doom-and-gloom. But if you look at the big picture, you might see that there’s a lot to be optimistic about in 2023 – in the housing market, the economy, and beyond.

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Insights From A Top Canadian Economist: Part 2

Canadian economist Benjamin Tal’s presentation at the National Mortgage Brokers Conference was eye-opening. In it, he posited a holistic view of what’s happening with the Canadian economy and what we can expect to happen next. He’s rarely been wrong in the 20 years I’ve been following him – so I thought it was incredibly important to share his insights with you. 

Part 1 of this series dives into the forces he believes are impacting inflation. These include international economies as well as lasting effects from the pandemic. There’s one factor however that I believe is most responsible for our current economic climate and is worthy of a larger conversation: the labour market.

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Rental properties as a secure long-term investment

Warning: More Rate Hikes To Come

Tomorrow will be the 7th rate announcement from the Bank of Canada this year. Of the last 6 announcements, 5 have resulted in rate hikes. Big rate hikes. Rate hikes we haven’t seen yet this century. To put things into perspective, most announcements we’ve seen in the last 12 years haven’t resulted in any movement to rates at all. And when they have, it’s been by no more than 0.25% (up or down).

Not only is it unheard of to announce 5 rate hikes in a row; but these rate hikes have reached as high as a full percentage point. Ludicrous. After 5 unprecedented increases, you would think that rates would plateau. 

Unfortunately I’m here to tell you that we’re not quite out of the woods. Yet.

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