In a time where identity theft and Ponzi schemes are plastered across the daily news, the last thing you want to worry about is yet another way to lose your hard-earned money.

As a homeowner, you need to be aware of crimes on the rise known as mortgage fraud and real estate title fraud.

In Part One of this mini-series, we looked  at Mortgage Fraud, in Part Two, we’ll examine  what Title Fraud is.

Title Fraud

Sadly, the only red flag for title fraud occurs when your mortgage mysteriously goes into default and the lender begins foreclosure proceedings. Even worse, as the homeowner, you are the one hurt by title fraud, rather than the lender, as is the case with mortgage fraud.

Unlike with mortgage fraud, during title fraud, you haven’t been approached or offered anything  this is a form of identity theft.

Here’s what happens with title fraud: A criminal  using false identification to pose as you  registers forged documents transferring your property to his/her name, then registers a forced discharge of your existing mortgage and gets a new mortgage against your property. Then the fraudster makes off with the new home loan money without making mortgage payments. The bank thinks you are the one defaulting – and your economic downfall begins.

Following are ways you can protect yourself from title fraud:

* Always view the property you are purchasing in person
* Check listings in the community where the property is located  compare features, size and location to establish if the asking price seems reasonable
* Make sure your representative is a licensed real estate agent
* Beware of a real estate agent or mortgage broker who has a financial interest in the transaction
* Ask for a copy of the land title or go to a registry office and request a historical title search
* In the offer to purchase, include the option to have the property appraised by a designated or accredited appraiser
* Insist on a home inspection to guard against buying a home that has been cosmetically renovated or formerly used as a grow house or meth lab
* Ask to see receipts for recent renovations
* When you make a deposit, ensure your money is protected by being held in trust
* Consider the purchase of title insurance

It’s important to remember that if something doesn’t seem right, it usually isn’t  always follow your instincts when it comes to red flags during the home buying and mortgage processes.

Always be sure to work with a accredited, professional mortgage broker. We are aware of the various fraud schemes and do our best to protect you by only working with reputable lenders. Be sure to call Justin Blacklock at 604.736.1855to discuss all your mortgage needs.

In a time where identity theft and Ponzi schemes are plastered across the daily news, the last thing you want to worry about is yet another way to lose your hard-earned money.

As a homeowner, you need to be aware of crimes on the rise known as mortgage fraud and real estate title fraud.

In Part One of this mini-series, we’ll take a look at Mortgage Fraud, what it is and how to protect yourself. In Part Two, we’ll examine Title Fraud.

Mortgage Fraud

The most common type of mortgage fraud involves a criminal obtaining a property, then increasing its value through a series of sales and resales involving the fraudster and someone working in cooperation with them. A mortgage is then secured for the property based on the inflated price.

Following are some red flags for mortgage fraud:

* Someone offers you money to use your name and credit information to obtain a mortgage
* You are encouraged to include false information on a mortgage application
* You are asked to leave signature lines or other important areas of your mortgage application blank
* The seller or investment advisor discourages you from seeing or inspecting the property you will be purchasing
* The seller or developer rebates you money on closing, and you don’t disclose this to your lending institution

Straw Buyer Scheme

Because of the recession, more people are desperate and eager to find a way to hang onto their homes. A couple was recently arrested in Canada after duping 100 families looking for help to avoid foreclosure in the US.

Another term for mortgage fraud is the “straw” or “dummy” homebuyer scheme. For instance, a renter does not have a good credit rating or is self-employed and cannot get a mortgage, or doesn’t have a sufficient down payment, so he or she cannot purchase a home. He/she or an associate approaches someone else with solid credit. This person is offered a sum of money (can be as much as $10,000) to go through the motions of buying a property on the other person’s behalf – acting as a straw buyer. The person with good credit lends their name and credit rating to the person who cannot be approved for a mortgage for his or her purchase of a home.

Other types of criminal activity often dovetail with mortgage fraud or title fraud. For example, people who run “grow ops” or meth labs may use these forms of fraud to “purchase” their properties.

The Fallout for Lenders

Fortunately (for you, at least), mortgage fraud typically hurts the lender the most.

Canadian precedents have been set in which banks are held responsible for mortgage fraud.

The BC Court of Appeals recently ruled that the lender  not the rightful property owner  is the one out of luck in a fraudulent mortgage scheme and that lenders “must ensure their mortgages are valid by taking steps to ensure that the registered owner obtained title to the property legally.” The same conclusion was made by the Ontario Courts a couple of years ago.

Banks, as you can imagine, aren’t too thrilled about this trend. Royal Bank of Canada recently sued a former bank employee over an alleged mortgage fraud scheme.

In Part Two of this series, we’ll continue with a look at Title Fraud.

Always be sure to work with a accredited, professional mortgage broker. We are aware of the various fraud schemes and do our best to protect you by only working with reputable lenders. Be sure to call Justin Blacklock at 604.736.1855to discuss all your mortgage needs.

While No-Frills mortgage products typically offer a lower or more discounted interest rate when compared with many other available products, the lower rate is really their only perk.

This type of product will only seem ideal for you if you have no plans to take advantage of benefits that will help you pay off your mortgage faster  such as pre-payment privileges including lump-sum payments.

Essentially, this product is only ideal for:

• first-time homebuyers who want fixed payments and have limited opportunities to make lump-sum payments during the first five years of their mortgage; and
• property investors who need a low fixed rate and are not concerned with making lump-sum payments.

No-Frills products also won’t let you take your mortgage with you if you purchase another property before your mortgage term is up  ie, portability is not an option with this product.  Portability is an important option that could save you money over the long term if the home of your dreams is within your reach before your mortgage term is up and rates have risen, which they have a tendency to do over a five-year period.

It’s understanding why these products may seem appealing.  After all, during tougher economic times who has the extra cash to put down a huge lump-sum payment?

And who needs a portable mortgage if they’re not planning on moving until the market picks up? But it’s important to remember that a lot can change over the course of five years or whatever term you choose for your mortgage.

The thing is, you can still obtain great mortgage savings without giving up the perks of traditional mortgages.  For starters, many lenders are willing to offer significant discounts if you opt for a 30-day “quick” close.

There are, however, other ways in which to earn your own discounts.  For instance, by switching to weekly or bi-weekly mortgage payments, and by obtaining a variable-rate mortgage but increasing your payments to match those of the going five-year fixed rate, you’ll be ahead of the typical 0.1% discount of a No-Frills product within approximately three years.

No-Frills products represent a great example of why interest rates are not the only important factor to consider when deciding whether to opt for a particular mortgage product. Much like buying a car, you get what you pay for. If you don’t want a car with air conditioning, a stereo, a cup holder, and so on, then you can get the cheapest car going… but you’ll likely regret it later.

If you have any questions about which mortgage is right for you, please give  Justin Blacklock a call at 604.736.1855 to discuss all of your options and choose the best mortgage for your circumstances.

Mounting credit card debt is a problem for many Canadians these days.  If you find that you’ve been overspending, it makes sense to look into how to limit your exposure to credit card debt, and the stress that comes along with it.  Here are some suggestions:

• Limit cash advances.

• Know the grace period on your credit card.

• Pay off credit card debt in full monthly to avoid high interest costs.

• Limit card usage for a specified period of time to help you reduce credit card debt.

• Make it a personal rule to spend only what you can pay off in a given month.

• Sign up for loyalty programs and make your dollar worth more.

• Make paying off debt a priority in your financial plan.

• If you find that you cannot pay down your credit card debt to your satisfaction, you may wish to consider a mortgage strategy with us to consolidate this debt at a lower interest rate.

Call Justin Blacklock at 604.736.1855 to talk about your credit card refinance strategy today.

Here’s a market update from our friends at Macdonald Realty; Simon Clayton, Kristie Marsden, Jason Low, Sandra Ens, Jason Feinstadt and Jenny Stephanson.

GDP and the Housing Market

On September 30th, Statistics Canada released a report stating that Canada’s GDP ’stalled’ in July, reversing its June growth of 0.1% to slide back to no growth in July. While these numbers seem small, economists had expected Canada’s GDP to grow by 0.5% and the figures suggest Canada may not bounce back as quickly or fervently as once hoped.

Surprisingly, the sectors that achieved the most gains in July were Eastern Canadian industries such as motor vehicle and parts production, while Western Canadian and big city sectors like mining, construction, and retail trade all faltered. This stands in stark contrast to Canada’s Consumer Confidence Index, which rose once again, and shows that Canadians believe that an economic recovery is at hand.

The real estate market has benefited tremendously from this increase in faith from the Canadian public. Home prices across Canada have risen for 3 straight months and several municipalities are seeing prices above pre-recession levels.

This is important to note. While economics plays a role in housing prices on the supply side, it has to be looked at in lock-step with the demand side, which is to a great extent dictated by a combination of Consumer Confidence and demographics.

So while the economics of housing may be lagging behind, Consumer Confidence and population inflows to Western Canada have, once again, begun pushing prices upwards.

Many factors come into play when it comes to pricing your home and a professional can help you through that process. To find out more, please feel free to contact one of us at the address below.

October 2009 Market Update

If you would like to learn more, please feel free to contact us by phone or by clicking on one of the links below:

Simon Clayton 604-764-0711

Kristie Marsden 778-836-4389

Jason Low 604-790-5276

Sandra Ens 604-263-1911

Jenny Stephanson 604-675-6214

Jason Feinstadt 604-263-1911

MacDonald Realty 604-263-1911