Toronto real estate. REAL ESTATE FRAUD IS PREVENTABLE!

In a precedent-setting decision, Ontario Superior Court Justice Randall Echlin this week nullified a mortgage that had been fraudulently placed on a property as a result of a fraud scam and identity theft. Judge Echlin stated that "it was incumbent upon the bank to exercise due diligence which might be able to prevent the fraud. Clearly it did not. Its simple failure to ensure that a proper in-person appraisal involving contact with the occupants of the subject premises would have uncovered the fraud".

The judge ruled against the bank and noted that had a valid appraisal been done when an appraiser attended and gained access to the inside of the property, the fraud would likely have been discovered. He found the bank negligent in its own loss for not utilizing such an appraisal as well as for other indices of fraud it ignored.

Gordon J. Tomiuk, AACI, P.App, President-elect of the Appraisal Institute of Canada and Chair, of its Ad Hoc Real Estate Fraud Task Force said: "real estate fraud is a crime that the Appraisal Institute of Canada (AIC) takes very seriously. He added that "AIC applauds the judge's ruling in view of the Institute's ongoing concern about the lack of site specific appraisals being conducted in the due diligence process. " Tomiuk reaffirmed that "without appropriate checks and balances, the mortgage lending process is open to all kinds of fraudulent schemes".

Judge Echlin's ruling comes on the heels of a bill introduced last month by Ontario Government Services Minister Gerry Phillips aimed at curbing real-property fraud. It highlights the severity of mortgage fraud and the importance his government is placing on reforming the Ontario Land Titles Assurance Fund.

AIC President Paul Olscamp, AACI, P.App added that, "Accredited members of the Institute have traditionally played an important role in alerting mortgage brokers and financial institutions of irregularities, although these can only be detected with a professional appraisal". Olscamp added "our members should be considered independent third party appraisal partners and real property auditors who can help in substantially reducing real estate fraud through their expert due diligence".

The 5,200-member Appraisal Institute of Canada (AIC), was founded in 1938, and is the premier real estate valuation association in Canada. Designated members provide reasoned valuations, widely respected by the courts, real estate corporations, chartered banks, trust companies, mortgage lending institutions, all levels of government and private individuals. Many users of valuation services will accept appraisal reports completed only by individuals, who have earned use of the AACI, P.App, or CRA designation.

ccnmatthews.com

Share on :

Tweet

Toronto real estate. REAL ESTATE FRAUD IS PREVENTABLE!

Reviewed by citra
Published : 2006-11-06T14:51:00-08:00
Rating : 4.5