Glossary
Title Fraud
A fraud where someone uses a forged title document to mortgage or sell a property they do not own, often after stealing the owner's identity..
Title fraud is a form of real estate fraud in which a person uses a forged or fraudulently obtained document — typically a transfer or a mortgage — to sell or borrow against a property they do not own. The true owner may not learn about it until a lender or a buyer comes looking for payment or possession.
How title fraud typically happens
Fraudsters usually start with identity theft. Using stolen personal information, they may impersonate the registered owner before a lawyer, notary, or land registry office. Two versions are common:
- Fraudulent sale: the property is listed, sold, and transferred to a buyer who pays the fraudster, leaving the real owner to unwind the transaction.
- Fraudulent mortgage: a mortgage is registered against the property using a forged signature or a power of attorney, and the funds are withdrawn and disappear.
Both versions rely on a lender or a legal professional accepting forged identification and trusting the land registry record. Provinces run land titles systems intended to guarantee title, and several maintain assurance funds that may compensate an innocent owner who loses property to fraud. Eligibility rules, limits, and deadlines differ by province, so confirm the current terms with the provincial land registry.
How it relates to title insurance and searches
Most Canadian lenders require title insurance as a condition of funding a mortgage. Policies commonly cover losses from forgery, fraud, and competing claims, while a careful title search helps confirm who is actually on title and what encumbrances are registered. Title insurance is not a substitute for verifying identity, and coverage limits and exclusions vary — read the policy wording or ask the insurer directly.
Why it matters to a borrower
For a homeowner with equity, an uninsured fraudulent second mortgage or refinance registered against the property can trigger demands for payment and, in the worst case, enforcement such as power of sale or foreclosure before the owner is even aware. Borrowers can reduce exposure by keeping identity documents secure, watching for unexpected mail from lenders or credit inquiries, checking the land registry periodically, and confirming that the lawyer or notary handling a transaction is who they claim to be.
Frequently asked questions
What is title fraud?
Title fraud is when someone uses forged documents or a stolen identity to transfer or mortgage a property they do not own. The fraudster may sell the home and keep the proceeds, or register a mortgage against it and take the funds. The true owner often discovers the problem only when a lender, buyer, or enforcement notice arrives.
Does title insurance cover title fraud in Canada?
Many Canadian title insurance policies cover losses caused by forgery and fraud, and lenders usually require coverage before funding a mortgage. Coverage limits, deductibles, and exclusions vary by insurer and policy, and claims must be reported promptly. Review the policy wording or contact the insurer to confirm what is covered in your situation.
How can I tell if someone has put a mortgage on my home?
Most provinces let you search the land registry for a fee, and some offer online services. Owners can check title periodically, watch for unexpected lender mail or credit inquiries, and confirm mortgage and property tax records match expectations. If something looks wrong, contact the provincial land registry and a lawyer promptly.
Sources
Related terms
- Mortgage Fraud — Mortgage fraud is obtaining mortgage funds through false information, forged documents, or a fraudulently transferred title, and it is a criminal offence in Canada.
- Title — Title is the legal ownership of a property, recorded in the provincial land registry that identifies the owner and any registered claims against the land.
- Title Insurance — Title insurance protects a homeowner or lender against losses from defects in a property's legal title that a records search may not reveal.
- Title Search — A title search is a review of the public land registry that confirms property ownership and reveals registered claims such as liens, charges, and easements.
- Power of Attorney Mortgage — A mortgage signed by an attorney on a borrower's behalf under a valid power of attorney, with the borrower remaining liable.