Identity Theft Mortgage Scams
On the front page of my morning newspaper was a column about the increasing incidence of mortgage scams. If you aren't aware of this, you should be. People steal your identity and then take out phony mortgages in your name. These scams seem to have become quite popular, because the returns are very good and the penalties have not yet matched the crime.
The mortgage negotiated in your name could be on your property (especially if it's paid-off) or it could be on another property. As a result of this criminal activity, some folks have had their properties taken away from them. Some have found themselves held liable for a mortgage on another property that they don't even know about.
How do these criminals get away with this?
It's complicated. Today, we do many banking and financial functions by email, telephone and fax. This means your mortgage rep may never have seen your face, and there is no bank eyewitness to witness your signature. For most of us, this is just fine. It fits our busy lives. In fact, my family negotiated our last mortgage just like that – we never saw the mortgage rep in person! We did everything by fax, phone and email.
It could be completely different if someone else had been masquerading as us.
In most cases of mortgage fraud, it starts with the stealing of your identity. This is something that you can make more difficult for any would-be criminal. Be sure to shred all documents that would have any identifying information on them. Never just throw these out, even if you have torn them into pieces (unless the pieces are VERY tiny).
You should shred all credit card bills, bills from utilities or government-related correspondence. You need to particularly ensure that you don't use your social security number to identify you to any company and that they don't use it either. If any company you deal with uses your social security number as your client number or includes it on their correspondence, tell them that you want a new identification number and be especially sure to shred any correspondence from them.
More frightening in these cases is that sometimes courts have upheld the bogus mortgages and required the person who is the victim of the fraud to pay them off! While this seems incredible, it has been reported in the Canadian news that such cases have occurred there.
Guard your personal data!