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Identity Thieves Steal Homes 255

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."
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Identity Thieves Steal Homes

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  • Oh no! (Score:5, Funny)

    by Anonymous Coward on Saturday September 02, 2006 @11:11AM (#16029646)
    Nothing for you to see here. Please move along.

    I think they stole the article, too. :(
  • by MyLongNickName ( 822545 ) on Saturday September 02, 2006 @11:13AM (#16029655) Journal
    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.
    • Re: (Score:2, Funny)

      by AndroidCat ( 229562 )

      And you wonder why we call Canada our 51st state.

      Why? Did you forge some papers giving you power of attorney?

    • Re: (Score:3, Informative)

      by HBergeron ( 71031 )
      I know America bashing is fun, and yes, in may ways we've become a corporate state, BUT, in this case you would never be able to get away with this under U.S. law. The title company would be entirely on the hook - in fact, it's why we have title companies, and why they make so much money - to pay for the times when they screw up and allow this sort of thing. Somehow the title companies in canada have lobbied they gov't to provide them with legal protections for risks that they are being paid to take. It
      • "The title company would be entirely on the hook..."

        I'll confirm. Renting houses is my full-time job. I own several and live off the rental income. After several years in computers (mostly tech support crap since I couldn't find a programming job even after graduating with a BA in CS) I wasn't making the money I wanted so I got my real estate license, practiced as a loan officer for a year and started buying houses.

        The title company has insurance for exactly this type of fraud. If someone stole on
  • Fight fire with fire (Score:5, Interesting)

    by mdhoover ( 856288 ) on Saturday September 02, 2006 @11:15AM (#16029659) Homepage Journal
    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.
    • by spiritraveller ( 641174 ) on Saturday September 02, 2006 @11:33AM (#16029707)
      I am glad that I live in America, where we at least retain some of the more important aspects of English common law...

      Who came up with the idea that they should let someone else sell your home as long as they can successfully trick the buyer?

      Whoever it was, they should be shot.
      • by stunt_penguin ( 906223 ) on Saturday September 02, 2006 @12:49PM (#16029929)
        "Whoever it was, they should be shot."

        Shot by someone faking the lawmaker's identity, so that it goes down on record as a suicide.

        Poetic or what?
      • by Lev13than ( 581686 ) on Saturday September 02, 2006 @02:59PM (#16030351) Homepage
        Who came up with the idea that they should let someone else sell your home as long as they can successfully trick the buyer? Whoever it was, they should be shot.

        Ah, but you forget that there are two victims here - the seller and the purchaser. Let's say you buy a house for $400,000, and you take out a mortgage for $300,000. You also plow $50,000 worth of renovations into it. The paperwork checks out, everything is fine and your family settles in.
        You've been living there for two years, and then one day someone claiming to be the real owner shows up and tells you to get the hell out of his house. Turns out he's right - this is/was his rental property. His long-gone tenants forged documents and sold the house, pocketing the $400,000 and running away. What happens to you? Your mortgage was legal, so if you get kicked out you're still on the hook for $300,000, not to mention the $100,000 of your own money that you essentially gave away. What if the owner refuses to cover the $50,000 in upgrades? Now you're out $450,000 and you're living out of your car. Not to mention legal fees, delays etc...
        Title insurance may ease the financial pain, but it still remains that two people have a claim to own the house, and one of them has to lose. That's why it sucks.

        On another note, Canadian law outside of Quebec is based on English common law.
        • by spiritraveller ( 641174 ) on Saturday September 02, 2006 @03:49PM (#16030484)
          Ah, but you forget that there are two victims here - the seller and the purchaser.

          No I've not. First of all, the seller is not a victim at all. He's a crook.

          As for the purchaser, it is up to him to do his due diligence by investigating the chain of title and the identity of the seller. Beyond that, buyer's title insurance is available, and EVERYONE should ALWAYS buy a buyer's title insurance policy whenever they purchase real estate (do not confuse this with the lender's policy which you will also pay for at closing).

          The owner will usually have no opportunity to prevent this type of fraud. The buyer always will.

          On another note, Canadian law outside of Quebec is based on English common law.

          Yes, but this is one area where they have deviated from the common law in a very stupid way. The common law rule is that you do not have the power to sell something that you do not own. The only way to "steal" real estate should be through adverse possession. But that requires that someone occupy (possess) the property adversely, exclusively and openly for several years without any action taken by the rightful owner.
          • by Tim C ( 15259 ) on Saturday September 02, 2006 @04:41PM (#16030599)
            No I've not. First of all, the seller is not a victim at all. He's a crook.

            I can only think that the OP meant the (rightful) owner - clearly the seller is a crook, but he's right, there are definitely two victims in this. More, if the purchaser has a family.

            But that requires that someone occupy (possess) the property adversely, exclusively and openly for several years without any action taken by the rightful owner.

            I believe that here in the UK (at least), the colloquial name for that Squatter's Rights. A quick google suggests that the required period is around 12 years.
          • Re: (Score:3, Insightful)

            by TapeCutter ( 624760 )
            "As for the purchaser, it is up to him to do his due diligence by investigating the chain of title and the identity of the seller."

            Unless this was all done with cash then it is the buyers bank who "owns" the house and the sellers bank who "owned" it before it was sold (if you don't belive me then miss a few morgage payments and see what happens). If anyone is to be punished for ignoring "due dilligence" then it should be the banks. However as the summary states the law favours banks, so joe-homeowner bec
        • by wytcld ( 179112 )
          It is straightforward, and inexpensive, to purchase title insurance. Title insurance precisely insures that your title to the home is valid. So if you are the buyer, and it turns out that the seller did not posess valid title, then the real owner gets the house back, but you get paid back your loss by the insurance company. If they buyer does not get title insurance - an absolutely standard feature of most house purchases - it's their own risk, as it should be.

          Wonder what Louisiana law says on this. Like Qu
      • by treeves ( 963993 )
        I have Indian neighbors who tell me that in India if you own a home, you don't really own it in many cases. If you let someone come live with you temporarily and then you say "it's time for you to go now", they can say back to you "we're not going anywhere, I own this property" and the courts will side with them. Then people go hire some mafia-like people to make their life miserable so will they will leave of their own accord. Crazy!
      • by radtea ( 464814 ) on Saturday September 02, 2006 @03:50PM (#16030487)
        I am glad that I live in America, where we at least retain some of the more important aspects of English common law...

        Except for habeas corpus. And there is that eminent domain thingy, too...

        Who came up with the idea that they should let someone else sell your home as long as they can successfully trick the buyer?

        In a free market, like we have in Canada, no one needs permission from anyone to sell something that is legally theirs. So "they" don't "let" anyone sell anything. We have a legal right to sell what is ours. The whole purpose of this fraud is to create the appearance that the property legally belongs to someone who does not in fact own it.

        Whoever it was, they should be shot.

        God bless America.
        • Except for habeas corpus. And there is that eminent domain thingy, too...

          We still have the writ of habeas corpus, although it seems that some very bad exceptions have been made to it.

          Obviously we still have eminent domain (a feature of English common law). Our constitution adds the requirement of just compensation, but I personally think that was a damn good idea.

          In a free market, like we have in Canada, no one needs permission from anyone to sell something that is legally theirs. So "they" don't "let" any
  • by antifoidulus ( 807088 ) on Saturday September 02, 2006 @11:15AM (#16029660) Homepage Journal
    Where people would just walk off with monuments. Truth is stranger than fiction it seems
  • by the eric conspiracy ( 20178 ) on Saturday September 02, 2006 @11:25AM (#16029687)

    I'd go for drawing and quartering someone who did this.

    • Fireants (Score:4, Funny)

      by Travoltus ( 110240 ) on Saturday September 02, 2006 @11:52AM (#16029765) Journal
      That's a slower, more painful death.
      • Re: (Score:3, Insightful)

        Hmm, I'd support tossing them into a pit filled with Tarantula Hawks [wikipedia.org] and Bullet Ants [wikipedia.org], then finish him off with a healthy dose of Dermestid Beetles [wikipedia.org]
      • The original "drawing and quartering" was being half-hung, taken down and having your guts pulled out and burnt in front of you, then ripped apart by teams of horses. If you'd been particularly infamous, they'd hire ABBA to play while this was going on.

        On the other hand...

        DALE: These fire ants are well-organized, highly trained insects. They'll swarm all over you and sting you all at once without warning on a single command. It's how they killed L. Ron Hubbard.

  • by Anonymous Coward on Saturday September 02, 2006 @11:26AM (#16029690)
    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.
    • by nuggz ( 69912 ) on Saturday September 02, 2006 @11:33AM (#16029709) Homepage
      This isn't new, it's been going on for at LEAST 3 years.
      I know because I was reading up on it when I bought my house 3 years ago.
  • by Jim in Buffalo ( 939861 ) on Saturday September 02, 2006 @11:27AM (#16029691)
    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."
    • by anagama ( 611277 )
      But there are two victims. The buyer has to pay on the mortgage but can't live in the house. If the house was taken from the buyer, the gov't would be complicit in stealing money from that party (don't forget the down payment that went straight to the scammers). I feel bad for both buyer and seller. It's hard to feel bad for banks, but fact is, the bank got screwed too. This is a no-win situation.
      • by honkycat ( 249849 ) on Saturday September 02, 2006 @01:52PM (#16030163) Homepage Journal
        There are four parties involved and under the current law, two victims. The legitimate owner and the would-be buyer both get screwed. The illegitimate seller and the bank both get off without injury (assuming the thief evades the authorities). This is a poor arrangement because the party most capable of managing the loss -- the bank -- has virtually no incentive to ensure that all its dealings are on the up-and-up.

        Even the smallest mortgage bank is far wealthier than the usual homeowners involved. Plus, they may have insurance for their investments (don't know for sure whether such insurance exists, but it seems likely) and can certainly be compensated through writing off loss through fraud.

        They are also in the best position to help ensure that everyone does their due diligence to prevent such fraud from occurring. If it costs the bank when they screw up, they'll take that a lot more seriously.

        Clearly the fairest way to resolve the situation is to refund the buyer's purchase price and return the property to its original owner. Everyone still has injuries (except the asshat fraudster), but no one is out a life's savings.
      • by Godeke ( 32895 ) * on Saturday September 02, 2006 @02:05PM (#16030190)
        It isn't hard to feel bad for the bank. Not at all. Here in the States we have title insurance and the title agencies are tasked with ensuring that everything is in order. If the institution screws up, the *institution* is on the hook. Considering they have the power and resources to do due diligance and verify information carefully, this is the correct answer.

        Amazing how much more careful an instutition is when they are on the hook rather than being able to say "oops, we didn't notice that nobody involved actually owned this: now give us our money anyway".
  • Fraud (Score:5, Interesting)

    by nuggz ( 69912 ) on Saturday September 02, 2006 @11:30AM (#16029702) Homepage
    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.
    • Not only that, but doesn't the lawyer who transfered the ownership gets nearly all the blame (they can't just transfer a home without being a little liable that they're transfering it to the wrong person).
      • by anagama ( 611277 )
        If the scammers had a third party, an old guy with a fake ID, it would be easy to get the Power of Attorney. Getting something notarized is a snap -- show up in front of a notary, show valid ID (a good fake can appear valid), and then sign the document. The notary will then state that he/she saw you sign the document, sign, and affix a stamp. Nothing to it all.
      • If you read the article, you'll see that the notary (who refuses to comment at this time :-) claims that he knew the seller and that the owner showed phot id - a drivers licnese. In other words, the notary screwed up, since there was no drivers license and he didn't know the seller.

        The likely outcome is that the notary's insurance is on the hook, and the notary will be disciplined. Probably a 1 year suspension.

        • by EvanED ( 569694 )
          the notary (who refuses to comment at this time :-) claims that he knew the seller and that the owner showed phot id - a drivers licnese. In other words, the notary screwed up, since there was no drivers license and he didn't know the seller.

          A) Don't even start to claim that his remaining silent is a possible indication of guilt, and
          B) What about a fake ID?
    • Re: (Score:3, Interesting)

      by timeOday ( 582209 )
      Surely it would be the title insurance company who ends up taking the hit in these cases?
      • by Rich0 ( 548339 )
        I should hope so. You're almost always required to buy it, for a considerable sum. And the only task the insurer has is to make sure the person who is selling the home owns it free and clear...
        • by NotQuiteReal ( 608241 ) on Saturday September 02, 2006 @01:03PM (#16029985) Journal
          If the purported owner does have clear title. It is title insurance, not identity verification. I am not sure who is in charge of that, but the title insurance company is just that - titles, leins, loans - paperwork recorded against the property.

          So - yes, they make sure the owner owns it, not "is this the owner"...

          • by Rich0 ( 548339 )
            title insurance company is just that - titles, leins, loans - paperwork recorded against the property

            If the only purpose of the insurance is to check if paperwork is recorded against the property, then what is the point?

            Wouldn't it just make sense for the bank to look up the paperwork themselves?

            If the law is going to make you shell out hundreds of dollars for insurance, then there should be at least some scenario where the insurance will provide some benefit.
        • Re:Fraud (Score:5, Interesting)

          by Planesdragon ( 210349 ) <slashdot&castlesteelstone,us> on Saturday September 02, 2006 @01:29PM (#16030074) Homepage Journal
          I should hope so. You're almost always required to buy it, for a considerable sum.

          In N.Y., at least, you should remember to buy a policy for yourself, too. If you just buy the insurance for the bank, and there's a problem that invalidates the title, the insurance company will pay off your loan to the bank -- and then come after you for the cash.

    • by Quietti ( 257725 ) on Saturday September 02, 2006 @12:37PM (#16029894) Journal

      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:

      1. Give the house back to the old man,
      2. provide monetary compensation to the buyers,
      3. strip the attorney that validated the transaction of his citizenship and forfeit all of his assets, to cover the price of reimbursing the victims, then promptly deport him.
      • 3. strip the attorney that validated the transaction of his citizenship and forfeit all of his assets, to cover the price of reimbursing the victims, then promptly deport him.

        Why? Unless he was working with the fraudulent seller, or was grossly negligent in identifying said seller (any GOOD identity thief will be able to provide convincing documentation, at least some of which will likely appear legit even if followe up), then the lawyer's been scammed just as much as the buyer. I'd much rather see the au

        • Why? Unless he was working with the fraudulent seller, or was grossly negligent in identifying said seller
          The lawyer stated on one of the documents that he personally knew the original owner of the house. Fake id or not, this claim makes one wonder about the level of the lawyer's involvement.
      • For what it's worth, I think that proper remedy would be to:
        1. Give the house back to the old man,
        2. provide monetary compensation to the buyers,
        3. strip the attorney that validated the transaction of his citizenship and forfeit all of his assets, to cover the price of reimbursing the victims, then promptly deport him.

        I might also add:

        4. the bank eats the mortgage and and fraud lawyer pays the costs. All costs to the old man are reimbursed including lost rent.

        If the bank pays for it, the

      • his story made the evening news in Montreal, back then.

        wow.... I live in Montreal and I never heard that one.
        (May be too young, I would have been in high school.)

        Thanks for bringing this to my attention.

        At least, afaik, there is a law saying that a pawn shop has to hold items for about 2 weeks before being able to sell them, in case the stuff turns up stolen. However, this is only hearsay..

        But seriously, that's a bit f*ked up. Pawn shop owners should be held liable if they accept stolen goods, no?

      • '' For what it's worth, I think that proper remedy would be to:

        Give the house back to the old man,
        provide monetary compensation to the buyers,
        strip the attorney that validated the transaction of his citizenship and forfeit all of his assets, to cover the price of reimbursing the victims, then promptly deport him. ''

        There are four parties involved, of which one is a criminal, one is very rich (the bank), two are shafted, and then there may be some parties who were grossly negligent or even accomplices. What
      • strip the attorney that validated the transaction of his citizenship and forfeit all of his assets, to cover the price of reimbursing the victims, then promptly deport him.

        Let's not be too hasty here and go off half-cocked. I say we burn him first.
      • Re: (Score:3, Interesting)

        by KDR_11k ( 778916 )
        The proper answer is to steal back. Empty the entire pawn shop, pawn it off elsewhere and see the pawnshop owner complain about his own law.

        The other answer involves high explosives but I believe we needn't go that far.

        strip the attorney that validated the transaction of his citizenship and forfeit all of his assets, to cover the price of reimbursing the victims, then promptly deport him.

        That's a complete human rights violation and unconstitutional in any country that respects the declaration of human right
  • by Newer Guy ( 520108 ) on Saturday September 02, 2006 @11:31AM (#16029703)
    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.
    • the (innocent) buyer should be made whole by the Notary's malpractice insurance policy.

      I think the mere existence of malpractice insurance causes a lot of negligence. If the notary is the one who screwed up, then he/she alone should pay for it. Take away his house if he doesn't have enough savings, but let him suffer personally the same way the innocent victims suffered. If it's just like "oh, shit, I will pay 5% more for insurance next year because of this", that may not be enough incentive to be more car

      • by BVis ( 267028 ) on Saturday September 02, 2006 @12:11PM (#16029807)
        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.
        • 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?

          Would programming a computer qualify as such a job? Like if you make a mistake and not know about someone's troll patent and after your product becomes successful in the market someone claims you infringed if if there is prior art and you get to spend the next several years fighting in court?

          Would designing a TV set qualify? Would Philo Farnsworth qualify?

          Or is it that is
          • by rs79 ( 71822 )
            "Would programming a computer qualify as such a job?"

            Yeah. I did some contract work remotely for Network Solutions a few years back (RRP diagnostics).

            They made me get a two million dollar Lloyds of London liability policy. So if I screwed up they could sue me and collect up to $2M.

            I live in a poor rural area and the local insurance agent had trouble coming to terms with the deal, but did. Fortuneatly I never screwed up and Lloyds of London made a few grand pretty easily. How they calculate these kinds of od
        • by aaarrrgggh ( 9205 ) on Saturday September 02, 2006 @01:17PM (#16030039)
          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.

          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.
          • In this case, the notar claimed to know the seller. Makes you wonder if he was an accomplice rather than just a bit careless.
        • 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 ha
      • by Rich0 ( 548339 )
        In theory the insurance is priced to cover expected losses, and spread them out. If you're going to owe the insurance company your life, why bother paying for the insurance at all? Just don't carry any insurance and then you owe the victim your life - not much difference from the position of the person paying for the mistake.

        And the logic behind malpractice insurance is that anybody in any line of professional work is going to eventually make a mistake, no matter how hard they try to avoid this. Rather t
    • 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
    • by anagama ( 611277 )

      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.

      Let's say you are a notary. Someone comes in and asks you to notarize something. You ask for his ID, and as you are required, you check it carefully. You see it is a genuine ID issued by the provicne/state/whatever (unbeknownst to you, the person standing there obtained

  • Not new... (Score:4, Interesting)

    by Anonymous Coward on Saturday September 02, 2006 @11:33AM (#16029706)
    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.
    • 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 legitimate
    • in the overheated housing market, doesn't want to lose the business.

      A rising tide lifts all boats (except for those no longer able to afford to get off the land - those people get flooded).

      Who immediately benefits from escalating real estate prices? It's not owners, buyers or sellers unless much ego is made about how much they paid (or if they cash out at a peak).
  • Odd (Score:4, Insightful)

    by Threni ( 635302 ) on Saturday September 02, 2006 @11:38AM (#16029725)
    > 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.
    • Apparently not in Canada ;-/
    • by zoftie ( 195518 )
      I won't invest a dime into canadian real estate until this one is resloved.
      Sounds just like communist russia, that I have left for greener pastures.
      Pastures, to be yanked from under my feet by anybody. Sort of like stealing
      my gravity.
      Thieves will always exist, but fact that real estate ownership - foundation
      of the economies can be exploited so easily and owners are the partly with
      least rights. I'd say to stay away from canadian real estate for now. at least
      for investment purposes. People who buying should b
      • The United States' various governments have been eroding personal property "rights" for many years now. The essence of ownership is control ... if I don't control it, I don't really own it no matter what a piece of paper says. I bought a home a few years ago, but if I ever get behind on my property taxes (interesting concept in it's own right) my home can be sold out from under me for a fraction of its value just to pay the balance due. Granted, I'm only a few years into my mortgage but even if I pay it off
        • by rahrens ( 939941 )
          It won't be sold without compensation. When a governmental entity in the US sells a property under a tax foreclosure, the amount of the sale after the government gets it's share goes to the registered lienholders , then to the owner. So if your home posseses enough equity above the mortgage value, and the equity is enough to pay for the delinquent taxes, theoretically, you could walk away with a few bucks, if you didn't have to pay a lawyer, too.

          This principal is covered under the Bill of Rights (I forget
    • Don't Oversimplify (Score:5, Informative)

      by darrint ( 265374 ) on Saturday September 02, 2006 @01:06PM (#16029995) Homepage
      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. :-)

  • They didn't mention any of these people having title insurance. Isn't that pretty much manditory when you purchase a home. If the defrauded buyers were insured, couldn't they file a claim, and use that money to pay off the mortgage?
  • by acedotcom ( 998378 ) on Saturday September 02, 2006 @11:56AM (#16029775)
    we should call them 'home pwn3rs'
  • No Walkthough? (Score:3, Insightful)

    by MadEE ( 784327 ) on Saturday September 02, 2006 @11:57AM (#16029780)
    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.
  • who got scammed? (Score:3, Insightful)

    by roman_mir ( 125474 ) on Saturday September 02, 2006 @12:00PM (#16029784) Homepage Journal
    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.
    • Oh i'm sure someone will pay in the end. However, There are so many different payee's to choose from, from the Mortgage company, the Notary, Various Laywers, the delay will be because they will be arguing among themselves for years.

      Meanwhile, until the status of the house is sorted, the guy ripped off cant enter it, and neither can the buyers (Who will have to pay the mortgage until its sorted.)

  • by wrecked ( 681366 ) on Saturday September 02, 2006 @12:17PM (#16029823)
    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 [www.ucc.ie].

    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 [msn.com]
    • by bidule ( 173941 )
      In Quebec there is RDPRM [gouv.qc.ca] to resolve some of these issues. Of course, it doesn't help with identity theft.

  • I am not a lawyer... (Score:5, Interesting)

    by Chineseyes ( 691744 ) on Saturday September 02, 2006 @12:18PM (#16029830)
    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 [google.com] 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.
    • by radtea ( 464814 )
      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.

      It may be simply that title fraud has become an industry here due to the fact that lawyers sell title insurance. I've bought two homes in Ontario in the past five years, and been strongly advised by my lawyer to buy title insurance both times (which I did--it is cheap and effect
  • by Anonymous Coward
    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
  • If you unknowingly buy stolen property, although you yourself are not guilty of any crime, you will be _REQUIRED_ to surrender it. If you are out of pocket for the incident, you can sue the person you bought it from... although even winning offers no guarantee you can get all your money back. Odds are, however, they will go to jail for a while, at least... if that's any consolation.

    Caveat Emptor. Always.

  • by Wry Cooter ( 899317 ) on Saturday September 02, 2006 @02:02PM (#16030183)

    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?
  • OK, in this story the kid does not sell the house, but it's still quite funny. It was related to me first hand by the now grown-up kid who did it, and he was wild so I have no reason to disbelieve him. It seems that the kid's family was being pestered by an aggressive real estate agent who wanted to help them sell the housse. They had been living there for years, and had no desire to move. The agent wouldn't stop calling. Well, the kid was able to pull off a reasonable impression of his father, and fin

  • ...purchasers get something called "title insurance". This is a policy that you pay for all at once, that insures you hold legal title to the property. It's one of the many fees you pay at closing. From a certain point of view, title insurance is a rip-off perpetrated by the legal-industrial complex that runs the system here. I mean, think about it. The government is supposed to record all these transactions, and record them properly. If they screw up, they ought to be the ones who are liable. Howeve

  • For those interested in this tricky situation, I'd recommend the book [amazon.com] and movie [imdb.com] 'House of Sand and Fog.' Jennifer Connely plays a woman who wrongly has her home taken for back taxes. It gets put on the auction block and purchased by an Iranian family (headed by Ben Kingsley. Both sides had a valid claim to the house. Tragedy ensues.
  • The biggest problem is that the average amount of damage per theif is over $90,000 while the average sentence for the person commiting the theft is less than 2 years. For someone that would likely be otherwise flipping burgers $45k a year is pretty good money and not only that room and board is payed for. Most victims I have known have recovered nothing from the theives themselves, goods are distributed around and are hard to trace directly to the theft. Its not like most of them have jobs either so rest

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