Be a mortgage-smart consumer
CMHC offers tips for fighting fraud
When you first set eyes on that home of your dreams, you start imagining how you’ll arrange furniture, raise a family there, the fabulous meals you’ll whip up in the sparkling kitchen and the parties you’ll host over the years. Likely the last thing on your mind is becoming a victim of mortgage fraud.
This particular con costs the Canadian economy hundreds of millions of dollars each year, according to a report from Criminal Intelligence Service Canada. It can also ruin your credit rating.
So how do you avoid becoming a victim of or accomplice to mortgage fraud?
The Canadian Mortgage and Housing Corporation recommends being an informed consumer. It also says to be wary of anyone who approaches you with an offer to make “easy money” in real estate. CMHC offers these additional tips:
■ Never deliberately misrepre- sent information when applying for a mortgage.
■ Never accept money, guarantee a loan or add your name to a mortgage unless you fully intend to purchase the property. If you allow your personal information to be used for a mortgage, you could be held responsible for the entire debt if the mortgage defaults.
■ Always know who you are doing business with and never sign anything without understanding what you are signing.
■ Use licensed or accredited mortgage and real estate professionals.
■ Get independent legal advice from your own lawyer or a notary public, and talk to them about title insurance and other methods of protection.
■ Contact the provincial land titles office to obtain the sales history of any property you are thinking about buying and consider having it inspected and appraised. An accredited appraiser will provide the property sales and MLS history.
■ Find out from your lawyer if anyone other than the seller has a financial interest in the home or if there are any outstanding liens or tax arrears.
■ If a deposit is required, make sure the funds are payable to and held “in trust” by the vendor’s realty company or by a lawyer or notary.
■ You can also help to protect yourself by inspecting your credit report at least annually through Canada’s two creditreporting agencies: Equifax Canada (equifax.ca) and TransUnion Canada (transunion.ca).