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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."
I think they stole the article, too.
ntario's land-registry system does not currently protect homeowners from such fraud, but instead favors banks, mortgage companies, and purchasers
And you wonder why we call Canada our 51st state.
See my journal for slashdot ID's by year. Mine created in 2005. http://slashdot.org/journal/289875/slashdot-ids-by-year
Maybe someone should start selling off the titles for ontario's land titles departments or of their local members of parliament.
Pretty sure you'd find their response to these actions would change rather quickly methinks.
Where people would just walk off with monuments. Truth is stranger than fiction it seems
Monstar L
I'd go for drawing and quartering someone who did this.
This is quite new and has just hit the news this summer. The provincial government is acting quickly and I'm guessing it won't be a problem by Christmas.
If someone registers a mortgage against your property it is because the bank thinks they are you. That means the bank is responsible for correctly identifying the owner of the house. If they are not sufficiently careful to correctly identify the real owner of the property, they are negligent. They can be sued for negligence. That can get a jury involved. There's no jury in Canada that will believe that a bank, who participates in the theft of your house, wasn't negligent. My wag is that we won't have many more cases of house theft because the banks will see the writing on the wall and change their procedures.
The government is complicit in the crime if they are going to enforce the results of the crime, as they have apparently done in this case. The victim was correct to refer to "lawlessness."
This sig, aah-ah, is comin' like a ghost-sig...
Yeah it's scary, but the mechanism is very simple.
Fraudulently transfer ownership to the criminal.
Sell the property to a third party, take the money and run.
The thing I don't understand is how the owner loses it. If someone steals your car and you can prove you're the origional owner you get it back. With a house it's quite simple to prove you're the owner.
It must be an interesting loophole to avoid this. Otherwise people wouldn't care. If someone comes to my door claiming they own my house I should tell them to screw off. If I purchase a house in one of these scams, it's why I have title insurance.
I also don't understand how they can't track the hundreds of thousands of dollars back to the fraudsters? If they can't track this money, why do they require reporting of all transactions over $10k? It obviously doesn't work.
The Notary Public who notarized the old guy's supposed signature on the Power of Attorney is the one who screwed up and should have to pay. It's HIS job to positively verify the identidy of the signer - and he obviously did not do that. Title should be transferred back to the original owner and the (innocent) buyer should be made whole by the Notary's malpractice insurance policy.
Identity thieves in Canada have begun targeting the homes of their victims.
It isn't new, it's been going on for years. It's just starting to hit the media. It made the news recently in Ontario because identity thieves falsely sold a house out from under the real owner. A bank issued a mortage against the house, and when no one made payments, tried to reposses the house. The appeal courts ruled in favour of the bank, saying that even though the house sale was fraudulent, the real owner is still responsible for the payments. The Ontario government is working to change the law.
Another common fraud is to buy a run-down house for 75k. Get some building permits, then sell it to someone else for 100k. Get some building permits, then sell it to someone else for 150k. Get some building permits, then sell it to someone else for 200k.
Then, get a mortgage on the property for 175k. The bank/mortgage lender sees all these transactions documenting the increase in the value of the house, and in the overheated housing market, doesn't want to lose the business. Lots of people do this legitimately - buy a run-down house, fix it up, and sell.
Of course, none of the transactions were real, the house was being bought & sold between the same group of people, and it is still the same run-down house worth 75k. People tend to have less sympathy for the bank, they usually say the bank should have sent a home inspector to examine the property.
> Ontario's land-registry system does not currently protect homeowners from such fraud
Odd. If it's not yours, you can't sell it. At least, that's usually the rule.
Truthiness tells me that America is Canada's Mexico
Warhammer forums
That's a slower, more painful death.
--- Grow a pair, liberals... stop letting the Republicans bully you!
we should call them 'home pwn3rs'
they say it is often more relevant then the comment above, all we know is its called the Sig!
The thing that baffles me about this fraud is who the heck buys a house without first taking a walkthrough. The guy who lives there is going to tell you what is up, perhaps strung with profanity. Heck even if it wasn't fraud the guy could be storing toxic waste in the basement for all you know.
I think the lawyers in question are responsible because they did not do the proper due diligence. Also if such a thing happens, the lawyers better have insurance against title fraud, because the original home-owner, who is now a victim can sue the lawyers, since they did not do their job properly. Also the lender itself probably can be sued for not doing their due diligence.
It was not the homeowner who got scammed, the homeowner (and the buyer) are victims, but it is the lawyers and the lenders that got scammed. And since it is their job not to get scammed, they should be made responsible.
Of-course if the system is so insecure that it is easy for the lawyers and the lenders to get scammed, then it is the government's job to fix the current problem with the victims and to secure the system.
In these cases the identity of the homeowners were stolen (there is more than one case.) Their signatures were forged, fake power of attorney were created. There should be an investigation firuging out exactly what happened, step by step and identifying the steps that made it possible for identity to be stolen. Then something should be done to fix those steps in the home buying process.
In this case I hope the Ontario government actually steps in and helps the homeowners to get their homes back, the buyers should get their downpayments back and the lenders probably will collect insurance.
You can't handle the truth.
That's a great idea!
Next, we should make people pay back the auto insurance companies when the get in an accident and total their cars! Serves them right for making a mistake!
Then all those people in New Orleans? Screw em! They should have to pay the banks back TRIPLE instead of filing homeowners claims! After all, they insisted on buying homes there, right?
In case you haven't taken my point, you've missed the entire concept of what insurance is for. People make mistakes. It happens. Even the best surgeon or lawyer can make an error that injures their patient/client/customer/whatever.
Yes, this notary was negligent. That's why he/she carries malpractice insurance: so a mistake won't make their families homeless.
Tell me, would YOU want to have a job where a mistake could cost you everything you own and 90% of what you earn for the next 20 years? We're not talking about high stakes gambling or high-risk investment here; we're talking about being a NOTARY.
Maybe when you climb down from your high horse you can tell the rest of us what it's like to be perfect. Maybe you can also tell us about how the notary making a mistake makes them more responsible than the perpetrators of the identity theft.
Never underestimate the power of stupid people in large groups.
Nono, America is Mexico's Canada!
This type of fraud (a rogue purchases property from an innocent vendor, flips it to an innocent buyer, then absconds with the money, leaving the property with unclear title) has been around at least as long as there has been the law of contract. The legal doctrine is one of "Mistake". Here is a more recent case from the U.K. about Mistake in contract, invovling a similarly fraudulent transaction, but with a car instead of a house: Hudson v. Shogun [2001] EWCA Civ 1001.
A choice quote from that British case: "It may seem remarkable that the law governing the consequences of a fraud as common as this is still in doubt, but it is." This would apply to all of the jurisdictions deriving their law from British common law, including Australia, Canada and the U.S.
Here is an American viewpoint (the Law Site on MSN) on the issue of Mistake
but I am a licensed Real Estate Broker in New York state (something I did in the process of earning my CE degree). In NY State at least and most lien theory states this sort of fraud is next to impossible especially if your bank still holds a mortgage lien on your property. In a lien theory state the bank never owns your property they only have a lien against it and while they can sell the lien they can NEVER sell your property unless they go into foreclosure proceedings in which case you should have paid your bills.
Furthermore lien theory states make it difficult to commit title fraud because for a title transfer to occur everyone who may have a lien on a particular propery (govt, bank, plumber etc...) has to have their lien satisfied. I'd love to see someone commiting fraud convince a bank that they should relinquish their 250K+ lien on a property they stand to make big $$ on by either collecting the interest of selling on the secondary mortgage market (fat chance).
As far as title/mortgage fraud goes I really wonder what kind of screwed up system Canada has. A quick search for "real estate" "title fraud" is completely filled with links about canadian real estate and almost no other country. Not that I have anything in particular against Canada, half my family lives there, but that is very telling.
I think the invisible hand of the market has its middle finger extended
--A wise old fart named SC0RN
I'm a real esate agent in the US. I don't think that scam would be as easy to carry off here. Loan companies have less power and would probably be out of luck. When people default on loans here the loan companies often have to work for over a year to get title to the home and resell it. It is so expensive for them that they will often sell a home with a poorly performing loan at a steep discount just to get out without paying all the legal fees. The details vary from state to state.
Even if a homeowner found themselves in this situation, instead of petitioning a central government agency (which has now power except to record deeds), they'd have a ton of private parties exposed to the transaction to sue, including private title insurers, covering the owner's interest in the property, a meaty legal target indeed.
In Canada, they changed something in the Laws during the early 1990's that basically legalized the purchase of stolen property, if the property is purchased thru a legit registered business.
The typical case would be a victim of robbery that kept all receipts in a safe at the bank, then noticed some of their stolen goods lying in a pawn shop shelf. They would then notify the the police, receipts and other proofs in hand, but would meet resistance from the pawn shop owners. Anyhow, in most cases, the most valuable merchandise was already gone and could not be traced. As I recall, pawn shop owners felt that the Law shafted them by forcing them to return stolen goods to their rightful owner, after already handing money in exchange. What did Canada do? They changed the Law. Once a pawn shop has paid money in exchange for some valuables, they legally own them, even if you can prove that they stolen goods that belong to you.
A friend in Montreal lost a whole recording studio worth of equipment that way, right after the law was changed. Showed up in various pawn shops, noticed that the serial number of serveral items there matched those of material declared as stolen to the police a week before... only to hear the police say that he could not recover them, because the Law protects pawn shop owners and tramples the rights of stolen property's rightful owners. his story made the evening news in Montreal, back then.
So, however grossly unfair as this story about stolen houses might be, it remains consistent with Canada's position of protecting the buyer, in total contempt of victims of criminal acts such as property title theft or robbery.
For what it's worth, I think that proper remedy would be to:
Software is not supposed to be about how to work around a useability issue. - Ken Barber
Heh, but he didn't realise that Slashdot adds a rel="nofollow" attribute to the link...
Windows is like decaf - it tastes like the real thing, but it won't get you through the day.
If someone steals your car, or robs your house of some consumer electronics, or something like that... it is one thing. But if someone steals someone elses house, which for most people represents the bulk of their life savings and what they have invested their economic future in... I wouldn't be supprised if people got very violent. People with nothing to lose are very dangerous. I wouldn't want to be the people living in a stolen house... or the lawyer or bank representative that brokered the deal. This is the perfect recipe for some sort of nasty violence. Ontario better change that law quickly.
So - yes, they make sure the owner owns it, not "is this the owner"...
This issue is a bit more complicated than you think.
Disclaimer: just a puny US real estate agent.
:-)
It doesn't help anyone if we throw around terms like "mine" and "yours" when dealing with real estate. I only know basic US real esate law. The idea of "it's my house" is intuitive. It is also false. (here)
Land is scarce, especially land in proximity to other desirable land. When you "have title," I emphasize, "have title" to land, you have certain rights over that land, possession, enjoyment (use in any legal manner), control, exclusion (keep others from entering), and disposition (transfer interest). You also have rights to the air above, ground beneath, and rights to use adjacent bodies of water.
Because land is so scarce, it is valuable, and these rights are partitioned in all kinds of ways. The rights are not only sold piecemeal, groups of the rights can be divided piecemeal between multiple people with different kinds of transfer abilities.
And have I mentioned various kinds of leases and wills?
One of the functions of local government is to maintain a database of who has title to what land in a given area. But these rights can be partitioned with such complexity that it is a serious undertaking to answer the question of exactly who has which land interests on a given parcel, which may itself have been divided!
So what is the local government to do? They maintain a database of "deeds". Deeds are contracts which transfer rights from one party to another, or correct errors (spelling anyone?) in previous deeds.
In other words, title is determined by examining a natural language log structure filesystem. Futhermore, the records in these databases only go back, what, 60 - 100 years? You think you own your home, but there may be a valid legal interest infringing yours.
Do you see why you need title insurance?
My intution is that they tried to simplify things in Canada. The simplification was probably to "clarify" ownerships by giving the government more authority to assert exactly who has title. This "favors" the mortagage company in these exploited cases. I think the intention was to reduce risk for everyone involved. Inadvertently they have introduced a legal vulnerability.
And you thought your OS vendor was a little slow to respond.
I have professional liability insurance as an engineer. I pay about 8% of my gross income for the insurance, and yes, it covers errors and omissions up to what I would make over the next 30 years. If I ever make a mistake that endangers public safety, I would likely lose my engineering license.
Unfortunately, Notaries are a weak link in the system. They really don't have enough information to do their job, the cost for notarizing a document is not commensurate with the risks they could incur, and people aren't really willing to pay more for a formality that generally has little value. Either they need additional insurance, or identity verification needs to happen at multiple levels.
In this specific case, I don't know how you would avoid having multiple tiered documents that would make it impossible to prevent this type of fraud. It becomes a shell game quickly.
After all, isn't Canada the last known whereabouts of famous foreclosure mortgage robber baron Snidely Whiplash?
I thought the mountie always got his man...
Is this landlord favoring policy possibly a British legacy?
Canadian juries can be quite activist. Most people think juries must base their decisions only on the law. That's not the case. The classic case of juries deciding on the morality of a case (rather than the law) was the abortion trials of Dr. Henry Morgantaler. No Canadian jury would convict him in spite of the fact that he was clearly violating the law. The government of the day gave up and changed the law to permit abortion.
So, yes Canadian juries haven't brought in some of the crazy decisions we see south of the border but that doesn't mean that they slavishly follow the law and ignore morality.
Consider what happens when a doctor screws up:
Current money flow: patient to doctor to insurance to lawyer+patient
Proper money flow: patient to insurance to patient
That is, the patient should be buying insurance to cover any errors made by the doctor. Doctors should not be liable. This way, the doctor bills are much lower and the patients can choose what quality of insurance to buy. (with "none" being a legit choice) The doctor doen't need to mess with insurance, and lawyers are less needed.
That'll never happen because we elect lawyers. Doh!
If a doctor does something which is not a legit accident, I still don't want him liable. I generally want him in jail. Mere stupidity means losing the license to practice, along with some sort of review of the school he attended.
Liability turns hospitals into casinos. With the right injury, you get the jackpot. People who want to play that game should be buying their own insurance so that the doctors don't have to be involved.
You buy it at the closing, the attorney usually manages it. If you see title insurance in your closing costs, it's likely "lender's title insurance". You need "owner's title insurace". You could buy it later, but it costs a lot more.
I can explanate how to administrate your network. You must configurate and segmentate it, so it can computate.
The U.S. system is very similar to the Canadian central banking system when it comes to monetary policy, but the regulatory structure is different.
While many banks are regulated through the Dept. of the Treasury, they do not borrow money from it. Instead, money is "made" by the Federal Reserve, which is controlled by a governement-appointed, but not controlled, board of governors (similar to the Supreme Court). Banks that are members of the Federal Reserve "borrow" money from it at the rate set by the board. This also controls the rates at which banks lend to each other. The Fed also sets the reserve requirments for banks, which controls how many times any given "made" dollar can be "churned" through the banking system.
If the government wants to borrow money, it does so through the sale of Treasury bills. The Federal Reserve is not involved in that process.
The reason you cannot find any truly "Nationwide" banks has to do with the Federal system of government used in the U.S. Constitution. Basically, to open a branch in a state, a bank must comply with both Federal and State law for that state. This creates something of a burden for a bank looking to expand operations.
Interactions between banks, (like loans and check cashing) are also generally run by the Federal Reserve.
SirWired