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Torrens and Technology: An Update from the Front Lines!

Rudy Nielsen, The Scrivener, Fall 2016

Back in 2010, I let you know how the provincial land title system guards British Columbians against the ever‑present threat of mortgage fraud.

Today, this is still a timely topic, given the unprecedented level of property sales since then.

Through the Torrens Land Registration System, British Columbia is neatly packaged into about 1.9 million active land titles that have been very active in the past 5 years. During that time period, the provincial land title system has processed over 1.3 million sales transactions worth $557 billion.

It’s amazing that so few of those transactions have been tainted by fraud, but there were some horror stories.

-  2013: A lender at the Bank of Nova Scotia in Kelowna faked an applicant’s employment letter by cutting the letterhead, along with the signature of her company’s human resources worker, from the original application and pasting them onto a new page. That nearly cost the applicant her house and her job.

Globe and Mail

-  2014: Police arrested an organized crime ring that allegedly used fictitious companies to commit mortgage fraud. The ring falsified documents related to employment records, bank statements, credit information, and tax assessments for homes in Calgary, Fort McMurray, and in British Columbia. It is believed at least $12 million was lost on over 20 homes.

Calgary Herald, MyMcMurray

-  2015: Police uncovered a $5 million mortgage financing fraud where a lawyer and a mortgage broker obtained financing and then fled with the investors’ money.

Calgary Herald

- 2015: Home Capital Group Inc., the country’s largest alternative mortgage lender, cut ties with 45 mortgage brokers in Ontario after an investigation into the production and use of forged documents, such as fake employment letters and income statements. Collectively, the brokers who were fired generated nearly $1 billion worth of mortgages in 2014.

Globe & Mail

-  2016: The Real Estate Council of BC paid $70,000 in compensation when a Realtor and a mortgage broker defrauded their client of $100,000 for a mortgage that was never filed.

Vancouver Province

To help combat fraud, the mortgage industry must have access to timely and reliable information. Today, online technology from companies such as Landcor can be your first line of defence against those who would try to “game the system.”

The advice we gave back in 2010 still holds true today: Whatever reporting tools you choose, make sure you use them. They are excellent defences against mortgage fraud.