In the latest real estate scam, homes are being sold behind owners’ backs. Here’s how.

What is total title fraud and how does it work? A Canadian insurance investigator explains.

Ali Amad
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Insurance investigator Brian King says total title fraud is becoming a severe threat for homeowners

A growing number of Canadians have fallen victim to a crime called total title fraud, in which scammers impersonate homeowners and sell their houses to unsuspecting buyers, then disappear with the profits. According to veteran insurance investigator Brian King, president and CEO of King International Advisory Group in Richmond Hill, Ontario, the problem has gotten particularly severe in the Greater Toronto Area, where skyrocketing home prices have juiced the incentives for fraudsters. In the past 18 months, King estimates that at least 30 homes in the GTA have been sold using this kind of scam. 

Despite an uptick in attention from media and law enforcement, King believes the total title fraudsters are nowhere near calling it quits. Here, he unpacks how the method moves from scammers’ imaginations to sales, and what Canadian homeowners can do to protect what’s rightfully theirs.

There have been lots of news reports in the past couple of months warning homeowners about total title fraud. How does it work?

There are two main types of total title fraud. The most common one is when a fraudster uses a fake ID to pose as a homeowner. They find the owner’s name through land title searches and use that along with a photo of themselves. Then the fraudster hires a legitimate real estate agent to list the property. Buyers typically only deal with the agent, so from their perspective, everything seems to be on the up and up. Once the sale closes and the funds are deposited into a bank account—which is also created using fake IDs—the fraudsters empty the account. The second, and more rare, type of total title fraud occurs when both the homeowners and buyers are imposters.

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So the buyer uses a fake ID, too?

Yes. Let’s say a house is worth $2 million and it’s mortgaged by the fake buyer for $1.5 million. The fake homeowner will then claim that the buyer is a friend or relative, and that they’ve decided to forgive the remaining $500,000 owing. The bank or private lender loaning the money doesn’t care as long as the mortgage looks good on paper. The two fraudsters then split the $1.5 million, and never truly take possession of the home. They just vanish with the money.

Is this a new kind of scam?

Total title fraud has been around for a long time. I’ve been investigating real estate fraud since 1979, and every once in a while I’d have a new case of it pop up. But there’s been a substantial uptick since late 2021. I’ve investigated five total title fraud cases since then; in the past few weeks alone, I’ve been hired on two additional cases.

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What explains the surge?

It partly has to do with virtual real estate transactions becoming more commonplace due to COVID—it’s harder to spot an imposter homeowner if you never meet them in person. The main contributing factor, though, is that home prices have risen considerably in the past few years. There’s more money to be made now. As one Toronto police officer told me, total title fraud is one of the frauds with the lowest risks and the highest rewards.

So how do scammers pick their victims?

They typically target houses that aren’t occupied by the homeowners—like vacant investment properties, or ones that owners are away from for an extended period of time. That way, several months can pass before the homeowners even notice a sale has occurred. In one of my current cases, a young Etobicoke couple temporarily moved to England for a two-year job opportunity. Scammers sold their home while they were overseas, and it took six months for them to figure out someone else was living in their place. By that time, the new  buyers had renovated the place to such an extent that the legitimate owners didn’t even recognize it when I showed them the photographs. To make matters worse, the scammers had sold all the former owners’ possessions, so the home wouldn’t appear lived-in when the new buyers moved in.

Who would do such a thing?

Typically, the people who pose as the homeowners are not the ringleaders. Once a house is targeted, the fraudsters thoroughly research the current owners. They can dig up details like the homeowner’s date of birth. A stand-in who is roughly the same age will usually be chosen to impersonate them. These stand-ins are paid anywhere from $5,000 to $10,000 for their time, and most work for four or five different organized crime groups operating within the GTA. In each of the cases I’ve worked on, the stand-in has been able to easily fool real estate lawyers. If we were giving out awards for acting, these people would win multiple Emmys.

And the so-called ringleaders?

They’re intimately familiar with the real estate world. They usually have a mortgage broker, real estate lawyer or agent guiding and coaching them. There could be anywhere between five to 10 people working on these scams.

How often do they get caught?

All the time. Right now, my firm is investigating a mortgage broker who we suspect is involved in about 20 fraudulent mortgages. Several lawyers have been disbarred and even charged for their roles in these scams. A few of the ringleaders are before the courts right now.

What’s your role in investigating these cases?

I’m typically hired by a title insurer or the scammed homeowner’s law firm to do document examination. I first try to eliminate the possibility of the homeowners being involved. Then I work to identify and interview other potentially responsible parties. I identify red flags to figure out who the guilty parties are.

What are the red flags?

One is that the cell phone numbers and email addresses fraudsters use are never the ones used by the legitimate homeowners. Whenever real estate professionals secure a new listing, I recommend that they search for their clients online to make sure they’re dealing with the right people. The real problem arises when those agents are involved in the scam themselves—they’re  intimately aware of the weaknesses in the system and can exploit them very well.

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How can we begin to address that sort of complicity?

If I could answer that question, we’d be able to stop these scams completely. I do think the recent publicity around these cases will help homeowners to be on the lookout. 

What can homeowners do to protect themselves?

The most important thing they can do is get title insurance. It’s a policy that protects homeowners against losses incurred due to total title fraud, or other losses related to their property’s title or ownership. A lot of people who have owned their homes for years don’t have it, but it’s very cheap to buy. It typically runs owners between $800 and $1200, and it’s a one-time fee. When a legitimate homeowner has been scammed out of their home, they do eventually get it back—even if a new buyer has already moved in. However, the court process to prove they were victims of fraud is a long one. If you don’t have title insurance, you’re the one footing the bill for that legal process. Homeowners should also watch out for any strange correspondence. If you get any unusual letters or emails, you should contact your real estate lawyer and have your title checked.

If you’re planning on vacating your house for a while, does it help to take a cue from Macaulay Culkin in Home Alone and make it seem as though your house is occupied?

It does! Measures like hiring house-sitters or leaving your vehicle parked in the driveway can keep your home off a scammer’s radar.

What about tips for buyers? You mentioned that they usually don’t meet the sellers, so it’s hard to tell if something is amiss. 

I always tell buyers to watch out for properties that aren’t listed on MLS or don’t have for-sale signs. Fraudsters are also typically in a huge rush to close a deal. If you find a house going for under market value by a motivated seller who accepts your first offer, your suspicion that the deal is too good to be true is likely accurate. Once total title fraudsters receive a half-decent offer, they’re generally going to take it and get out—before anyone catches on. 

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