Identity Thieves Steal Homes

westcoaster004 writes "Identity thieves in Canada have begun targeting the homes of their victims. Recently, several cases of mortgage and title fraud have involved identity theft; several individuals have had their houses sold without their knowledge. Ontario's land-registry system does not currently protect homeowners from such fraud, but instead favors banks, mortgage companies, and purchasers. The provincial government is however working to solve the problem."

Comments

I thought

[daft_one]

it was our suburb.

Re:Odd? Sure - when you don't know the facts

[rtrifts]

There is some quick and dirty misreporting on this issue.

First - there is a difference between "Registry" and "Land Titles". Land Titles is a Torrens based system where your title is guaranteed. The problems described in these articles largely arise under the Land Titles registration system, not Registry.

Secondly, when you have a bona fide purchaser for value without notice, you have someone who is equity's darling. They are NOT the party who ought to "suffer."

Thirdly, these articles also misreport the consequences of being the victim of land fraud. The man who lost a rental property will get full compensation from the Land Titles fund. This is not a case where the victim or the purchaser *should* be out any appreciable money. What is really going on is an attachment of an 89 year old man to the rental property itself. He doesn't want the money - he wants the property back. And that's not going to happen; moreover, in my submission - it should NOT happen in the circumstances of this case.

Fourthly, this is the third such big case to hit our courts over the past year. The one prior to this involved a woman who lost the house she resided in. Morris Cooper, the lawyer for the original home owner, lost at first instance based on a recent decision of the Court of Appeal for Ontario. Cooper's case is off to the Court of Appeal and the Court will be invited to re-examine its decision in light of the new facts in this most recent wave of land fraud.

Fifthly - this is really nothing new, in the sense that American jurisdictions have experienced a wave of fraud over the years, especially though the use of Quit Claim deeds in Florida and other jurisdictions. It is relatively new to Canada. Frankly, I think title insurance has made the problem worse - not better.

Sixthly, the "Slashdot solution" of imprisoning everybody for a bazillion years is not going to happen. We don't do that in Canada. The North York lawyer whose notarized a power of attorney will, I expect, be investigated by the Law Society of Upper Canada and the LSUC will take disciplinary action - if required - based on the evidence that their investigation reveals. I don't know the details and after only reading a newspaper article which probably does not appreciate the real details and nuances of what happened and what didn't - you don't know the real "facts" either. I'm prepared to withhold judgment of a colleague's practice until I know what happened - and what didn't.

Seventh, and perhaps most importantly, the suggestion of putting extraordinary obligations on the mortgagee sounds deceptively appealing. That's only because you have not thought it through. It only wise to a point. Mortgagees do their titles searches - that's why we *have* a land registry/ land titles system in the first place. If you put an in-depth investigatory onus upon the lender (which is what a Torrens Land Titles system is designed to avoid in the first place), what we will all have is *significantly higher* mortgage fee on every transaction, a significant increase in the time it takes to secure mortgage financing and a *significant* slowdown in the housing market which will ripple like a shockwave across our economy and trigger a recession. That's simply not just an unwise idea - it's a plainly *STUPID* idea.

What we are *REALLY* talking about here is how to deal with a problem - a *risk* - that you can never remove entirely from any land system. All you can so is manage the risk and spread the cost of that risk out across a lot of people so that the cost of that burden is at least manageable and transaction costs are minimized for all. We DO have a compensation fund. What we don't have is a magic wand so that a home owner and a home purchaser both get the same property when they are victims of a third party rogue. The money we can deal with - the question of possession and specific performance we cannot. >>Someone has to lose that right to possess the property.

The common law has treated the bona fide purchaser