Prevent Foreclosure Fraud From Happening to You
Published on 29 August 2022, 07:22:56 AM
Poor credit or a minimal down payment can make you easy prey for foreclosure fraud.
Watch out for scammers who say they can solve mortgage problems for a fee, promise no qualification mortgage approvals, or offer 0% down loans. Legal authorities recently reported at least 32 home title frauds in Ontario and B.C.
You could be in over your head in no time.
Quick Read
How can you tell a scammer from real estate deals that are bona fide?
How likely is home title theft?
How do I protect against foreclosure fraud in Ontario?
Are You a Victim of Foreclosure Fraud?
Excruciatingly high interest rates that bankrupt you or a request to transfer title to a property to a lender can be red flags you are caught in a foreclosure fraud. Reputable mortgage lenders are a party to your home’s title, but you own the home. All bets are off with foreclosure fraud.
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Fractional interest fraud.
Typically, title fraudsters forge your signature to pose as you and steal title to your home to sell it. But a foreclosure fraudster may promise to stop your home’s foreclosure in exchange for a share of the title and a monthly fee. They install a “straw owner” to hide their identity. The straw owner, who has legal title to your property, files for bankruptcy, dragging out the foreclosure while the fraudster collects their fee.
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Fake quit claim deed.
Who’s that living in your foreclosed home? Forged quit claim deeds can make it appear you surrendered your home to a fraudster, who rents or sells it while a foreclosure action is underway. Since you are technically still the owner, any damages they cause are deducted from your home’s remaining equity. What to do if your lender forecloses.
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Title transfer consultant.
Look out for rent-back schemes that involve transferring title to property to a mortgage consultant. The consultant may claim you can remortgage your home when your finances improve. More likely, you’ll be evicted, while the fraudster rakes in the profits by selling it. File a complaint against a mortgage broker.
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Phoney loan assistance.
Those We buy houses for cash! ads can be alluring. Signing for a first, second, or third mortgage when your payment is in arrears can leave you open to foreclosure fraud. Fraudsters may not only keep your mortgage payments, but force you to sell by demanding immediate loan repayment. Recognize mortgage fraud.
Signs of Foreclosure Fraud
You may be a victim of foreclosure fraud if:
- a mortgage application transfers property title
- legal documents are altered after you sign
- misleading comments are made about your mortgage status
- a lender files for foreclosure for suspect reasons, like suggesting you’re not following lending regulations
- withheld facts affected your decision.
Ask us for referrals to a real estate lawyer or fraud specialist to assist you in disputing claims that affect your mortgage.
More Red Flags for Foreclosure Fraud
Be sure you have a mortgage approval or letter of commitment from a lender before you sign a mortgage contract. Oral agreements are difficult to enforce and reputable lenders won’t request cash to secure a mortgage. Your mortgage and downpayment are held in trust by a real estate lawyer, not a mortgage broker.
So if you are:
- coerced to sign too quickly
- asked to accept terms you don’t understand
- hit with excessive fees to apply for a mortgage
- or told your mortgage fell through on closing day
report the transaction to a real estate lawyer. How to spot undue influence.
How to Prevent Foreclosure Fraud
Before you sign a mortgage contract that seems too good to be true, talk to a licensed Ontario real estate lawyer. Your broker or lender must honour your right to a mandatory, 48-hour cooling off period to think over any mortgage offer. Signing the mortgage contract.
If you think a foreclosure fraud has you in its grip:
- Tell your mortgage lender. How to protect yourself from title fraud.
- File a police report.
- Have Axess Law search title to your property.
- Do a credit score check.
- Ask our licensed real estate lawyers for referrals to a civil lawyer. If the amount is under $35,000, sue in Small Claims Court. Read the court rules.
- Contact the Ontario Better Business Bureau to warn other homeowners.
More ways to report real estate frauds.
Why You Need a Real Estate Lawyer
Handshake deals unnecessarily complicate real estate transactions. Axess Law goes over the fine print in your offer to purchase to protect you from foreclosure fraud. We review terms and conditions you may not understand and, when necessary, liaise with a seller’s or buyer’s lawyer to draft an amendment to the agreement of purchase and sale.
Our licensed real estate lawyers ensure financial documents you sign are legally valid and binding. We add clauses that allow you to cancel offers to purchase by mutual consent. When the seller or buyer disagrees, we explain the consequences of walking away from a real estate transaction. If a real estate deal falls through who gets the deposit?
If your offer omitted a professional home inspection, your Axess Law real estate lawyer amends the agreement of purchase and sale to make your offer subject-to that condition. We advise you how to respond if a home inspector finds minor defects or major structural issues that could cost you thousands to repair. Axess Law negotiates with the seller’s lawyer to have repairs made before you make final possession or to reduce the sales price to allow you to address a home inspection report. Wording the home inspection clause Ontario.
We discharge existing mortgages and liaise with banks, trust companies, credit unions, or private lenders to witness and sign new loan obligations. Finding financing for a new build home or resale property can take longer than you think. Your Axess Law real estate lawyer requests to extend your real estate purchase completion date to give you the extra time you need. What a real estate closing lawyer does.
Changing lenders when you renew your mortgage? Our professional real estate lawyers prepare the legal documents you need to complete a mortgage refinance. When the mortgage details are final, we search title to property for financial claims or construction liens before transferring title at a local land registry. How to transfer title to a family member in Ontario.
An Axess Law real estate lawyer can search title to property for construction liens or legal claims, and add title insurance to protect you from foreclosure fraud or title errors. We add lenders to title before registering the new owner’s title at a local local land registry office. Liens on property.
Affordable Real Estate Lawyers, Anywhere You Are
Access lawyers for less in the Greater Toronto Area, Ottawa, or by remote video conference. Our flat fee rates are affordable, and all inclusive (excluding taxes, disbursements, and third-party charges). Your final invoice includes no surprises, or hidden charges. Your itemized statement of adjustments is explained when we deliver it, and we answer any questions you have about it. You can get independent legal advice, or add a family member to a property for a modest title transfer lawyer fee. Axess Law offers you only the legal services you absolutely need.
Hire virtual real estate lawyers in Ontario.
Make Legal Appointments Online or By Phone
Making legal appointments is as easy as picking up your phone. Dial toll free to 1-877-402-4207 or in Toronto, call our 647-479-0118 lawyer line to schedule convenient video conferences or in person meetings. Axess Law makes video conference calls anywhere you are, 7 days a week. No time to call? Use our online booking form to book your own appointments. Our licensed real estate lawyers can meet with you at any of our conveniently located Greater Toronto Area or Ottawa law offices.
We have onsite parking and easy transit access.
Click here to learn more about Axess Law’s real estate law services.
