Can Someone Actually Steal Your House?

Diane Buchanan • March 29, 2016

It might sound unbelievable, but it’s absolutely possible for someone to steal your house. It’s called title fraud, and it’s a problem that has been around for a while in Canada. And although exposure to title fraud is minimal compared to, say, debit or credit card fraud, the damage to its victims is considerably more severe. Title fraud is potential big money for perpetrators, and their schemes can be complex to say the least. Don’t underestimate the lengths to which they will go to cash in on a big payday.

Let’s break down title fraud, identify who is most at risk, and look at the best ways to protect yourself from having your house stolen out from under you!

Title Fraud

Title fraud almost always starts with identity theft. When someone steals your identity, they actually become you (well not really, but as far as anyone who doesn’t know you is concerned, they are you). So once they become you, they are acting as you, the scope of the fraud starts with what you could carry out as normal business, and then grows from there with increased deception and elaborate plans.

Here are some common scenarios. The perpetrators could do any of the following:

  • Using your identity, they could discharge your current mortgage and replace it with one at higher value, pocketing the difference in cash, using a bank account they created in your name, only to disappear before the loan/mortgage goes into arrears and a collection agency calls seeking repayment.
  • Using fake id and forged documents, they could transfer the title of your property out of your name, register a home equity line of credit or mortgage against the title, advance the funds in cash, and disappear, leaving you with a foreclosure notice a few months down the road.
  • Depending on market conditions, if it’s a real seller’s market, they could even potentially sell your property sight unseen, close the transaction, and skip town before the duped buyers show up at your house in a moving truck, ready to take possession.

The scary thing is, as the victim of identity theft and/or title fraud, there is legal precedence set that as the mortgage was taken out in your name and it was done so as a legal transaction, the onus is on you to prove that you were the victim of fraud. Until you do so, you are responsible for the repayment of the debt or it will damage your credit score.

As in the case of someone fraudulently selling your house out from under you, there is legal precedence set where the new buyers could actually be awarded possession of your house, because you were the victim of identity theft and title fraud, they weren’t. As far as everyone else is concerned, the buyers executed a perfectly legal transaction. It falls on you to prove otherwise!

Who is Most at Risk?

The more equity you have in your property, the more likely you are to be targeted. Let’s say your property is worth $450k, and you owe $150k on your mortgage — there is potential access to $300k of equity. However, as the maximum refinance amount in most cases is 80% of the property’s value, in this case $210k would be accessible. And as most lenders limit the amount of cash you can refinance out of a property to $200k, this is a perfect target.

Properties that are owned clear title (no mortgage or line of credit registered against the home) are considerably more susceptible than properties with a mortgage because there is no mortgage to discharge. Essentially, there is one less hurdle for the fraudster to register a new mortgage or transfer the title.

Unfortunately, if we have to label an age group that is most at risk, it would be the older generation. Seniors are more likely to own their properties clear title and are less savvy about identity theft and may take longer to realize something is going on.

Protect Yourself!

Okay, if your heart is beating a little faster now, don’t worry, it will be okay. Here are some practical steps you can take to protect yourself!

The first line of defence to prevent title fraud is to protect yourself from identity theft. The financial consumer agency of Canada has some good information that outlines the basics. But a lot of it is common sense: keep your ID close, don’t disclose your personal information to strangers on the phone, and if something smells fishy, make sure to investigate before proceeding!

Now, in order to protect yourself from title fraud directly, you can purchase something called title insurance! And if you have recently purchased or refinanced your property, chances are you already have it. With the increasing amount of mortgage fraud, a lot of lenders (most broker channel lenders) make title insurance a mandatory condition of lending you money. This is a really, really good thing.

There are two types of title insurance available from a few different providers, offered directly from your lawyer’s office. The first is title insurance that covers the lender in case of title fraud, and the second covers the lender and you. It’s smart to go with the more comprehensive policy that covers you!

Title insurance is relatively inexpensive and covers you as long as you own the property (even if you discharge your mortgage). It can be purchased at any time, so if you aren’t sure if you have title insurance, might be worth a look through your mortgage documents. And if you can’t make heads or tails of them, take them to your mortgage broker and they will be happy to work through everything with you.

What to Do if You Suspect Fraud?

If you suspect or find out that you are the victim of title fraud, you should do the following:

  • Contact the Canadian Anti-Fraud Centre , at 1-888-495-8501 or info@antifraudcentre.ca.
  • Report the situation to the police.
  • Report the fraud to both credit reporting agencies Equifax and TransUnion.
  • Contact your provincial land registry and let them know.
  • Keep all documents and record the exact time you became aware that you were a victim.

 

This article originally appeared in the DLC Newsletter for April 2016.

DIANE BUCHANAN
 Mortgage Broker

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Going Through A Divorce? Protect your Credit

By Diane Buchanan • August 13, 2025
Divorces are challenging as there’s a lot to think about in a short amount of time, usually under pressure. And while handling finances is often at the forefront of the discussions related to the separation of assets, unfortunately, managing and maintaining personal credit can be swept aside to deal with later. So, if you happen to be going through or preparing for a divorce or separation, here are a few considerations that will help keep your credit and finances on track. The goal is to avoid significant setbacks as you look to rebuild your life. Manage Your Joint Debt If you have joint debt, you are both 100% responsible for that debt, which means that even if your ex-spouse has the legal responsibility to pay the debt, if your name is on the debt, you can be held responsible for the payments. Any financial obligation with your name on the account that falls into arrears will negatively impact your credit score, regardless of who is legally responsible for making the payments. A divorce settlement doesn’t mean anything to the lender. The last thing you want is for your ex-spouse’s poor financial management to negatively impact your credit score for the next six to seven years. Go through all your joint credit accounts, and if possible, cancel them and have the remaining balance transferred into a loan or credit card in the name of whoever will be responsible for the remaining debt. If possible, you should eliminate all joint debts. Now, it’s a good idea to check your credit report about three to six months after making the changes to ensure everything all joint debts have been closed and everything is reporting as it should be. It’s not uncommon for there to be errors on credit reports. Manage Your Bank Accounts Just as you should separate all your joint credit accounts, it’s a good idea to open a checking account in your name and start making all deposits there as soon as possible. You’ll want to set up the automatic withdrawals for the expenses and utilities you’ll be responsible for going forward in your own account. At the same time, you’ll want to close any joint bank accounts you have with your ex-spouse and gain exclusive access to any assets you have. It’s unfortunate, but even in the most amicable situations, money (or lack thereof) can cause people to make bad decisions; you want to protect yourself by protecting your assets. While opening new accounts, chances are your ex-spouse knows your passwords to online banking and might even know the pin to your bank card. Take this time to change all your passwords to something completely new, don’t just default to what you’ve used in the past. Better safe than sorry. Setup New Credit in Your Name There might be a chance that you’ve never had credit in your name alone or that you were a secondary signer on your ex-spouse’s credit card. If this is the case, it would be prudent to set up a small credit card in your name. Don’t worry about the limit; the goal is to get something in your name alone. Down the road, you can change things and work towards establishing a solid credit profile. If you have any questions about managing your credit through a divorce, please don’t hesitate to connect anytime. It would be a pleasure to work with you.

How Employment Status Impacts Your Mortgage Application

By Diane Buchanan • August 6, 2025
Chances are if you’re applying for a mortgage, you feel confident about the state of your current employment or your ability to find a similar position if you need to. However, your actual employment status probably means more to the lender than you might think. You see, to a lender, your employment status is a strong indicator of your employer’s commitment to your continued employment. So, regardless of how you feel about your position, it’s what can be proven on paper that matters most. Let’s walk through some of the common ways lenders can look at employment status. Permanent Employment The gold star of employment. If your employer has made you a permanent employee, it means that your position is as secure as any position can be. When a lender sees permanent status (passed probation), it gives them the confidence that you’re valuable to the company and that they can rely on your income. Probationary Period Despite the quality of your job, if you’ve only been with the company for a short while, you’ll be required to prove that you’ve passed any probationary period. Although most probationary periods are typically 3-6 months, they can be longer. You might now even be aware that you’re under probation. The lender will want to make sure that you’re not under a probationary period because your employment can be terminated without any cause while under probation. Once you’ve made it through your initial evaluation, the lender will be more confident in your employment status. Now, it’s not the length of time with the employer that the lender is scrutinizing; instead, it’s the status of your probation. So if you’ve only been with a company for one month, but you’ve been working with them as a contractor for a few years, and they’re willing to waive the probationary period based on a previous relationship, that should give the lender all the confidence they need. We’ll have to get that documented. Parental Leave Suppose you’re currently on, planning to be on, or just about to be done a parental leave, regardless of the income you’re now collecting, as long as you have an employment letter that outlines your guaranteed return to work position (and date). In that case, you can use your return to work income to qualify on your mortgage application. It’s not the parental leave that the lender has issues with; it’s the ability you have to return to the position you left. Term Contracts Term contracts are hands down the most ambiguous and misunderstood employment status as it’s usually well-qualified and educated individuals who are working excellent jobs with no documented proof of future employment. A term contract indicates that you have a start date and an end date, and you are paid a specific amount for that specified amount of time. Unfortunately, the lack of stability here is not a lot for a lender to go on when evaluating your long-term ability to repay your mortgage. So to qualify income on a term contract, you want to establish the income you’ve received for at least two years. However, sometimes lenders like to see that your contract has been renewed at least once before considering it as income towards your mortgage application. In summary If you’ve recently changed jobs or are thinking about making a career change, and qualifying for a mortgage is on the horizon, or if you have any questions at all, please connect anytime. We can work through the details together and make sure you have a plan in place. It would be a pleasure to work with you!