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Law Times • June 1, 2009 FOCUS Page 13 Mortgage and property frauds against elderly increasing M BY GLENN KAUTH Law Times ortgage and property fraud have been hot topics in Ontario in recent years, but a particularly vulnerable group is fi nding itself an increasingly likely victim of the scams — the elderly. "We're seeing all kinds of title fraud — things we hadn't seen 10 years ago," says Graham Webb, staff litigation lawyer at the Advocacy Centre for the El- derly in Toronto. As a result, seniors are losing their often mortgage-free homes in greater numbers, some of whom end up on Webb's caseload as they turn to the courts in both criminal and civil proceedings. Th e tricks fraudsters use aren't necessarily new. Many of them involve powers of attorney, a le- gal option Webb refers to as a "licence to steal." In many cases, the perpetrators are relatives of the victims who use their author- ity under a power of attorney to transfer title over the grantor's property to themselves and then take out a mortgage. In other instances, someone might forge a power of attorney in order to commit fraud, Webb notes. More common, however, are more subtle ways of getting con- trol of an elderly person's property. Webb calls them coerced transac- tions "where the older adult is persuaded to sign something, usually without independent le- gal advice." Th e senior, of course, might not fully understand what he or she is signing. An inheritor who holds the property in a joint tenancy, for example, might per- suade the original owner to sign a mortgage document and then take the proceeds. "Sometimes it's just one mortgage but often two or three," Webb notes. Sadly, Webb has also seen cases where the victim has never actu- ally lived in the home for which he or she is now on the hook for paying. In one instance, a woman undergoing fi nancial problems transferred the title of her own house to her mother. When the daughter then defaulted on her house payments, the mother end- ed up in mortgage proceedings. Webb has a few ideas on why such frauds are on the rise. Competition among mortgage Marketplace OFFICE FOR RENT EXCLUSIVE office for rent - Lovely third floor office (approx. 250 sq. feet). Hardwood floors, located in charming Victorian style three-storey house. Large windows overlooking mature tree-lined street right next door to Yorkville. Available June 1. Contact Clayton Ruby or Mandy Machin at 416- 964-9664 or mmachin@ruby shiller.com To advertise call 905-841-6481 CA019 (LT 1-2x4).indd 1 1955 to Present With annotations by Tried, Trusted and True Edward L. 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This unique and convenient online resource offers you easy access to all provisions of the Criminal Code at any specific point in time. Just enter the relevant date. Prices starting from $190 • Contact your Account Manager today for more information. For a 30-day, no-risk evaluation call: 1 800 263 2037 or 1 800 263 3269 www.canadalawbook.ca Canada Law Book is a Division of The Cartwright Group Ltd. • Prices subject to change without notice, to applicable taxes and shipping and handling. www.lawtimesnews.com 5/27/09 2:29:08 PM lenders for business is one. "Now, you can actually do a mortgage application without meeting anybody," he says. As well, until recently the Municipal Property Assessment Corp., put large amounts of information online, making it easier for eager fraudsters to fi nd out about land titles. In addition, new land registration documents available online don't necessarily look like the ones seniors are used to seeing, which can facilitate fraud. "Now, the forms they're being asked to sign, they don't recognize them," Webb says. Th e legal remedies available to seniors vary according to the type of fraud. Legal amend- ments granting relief to victims of scams involving forged docu- ments have helped but, Webb says, that doesn't necessarily as- sist elderly people tricked into signing something or who suff er the misuse of a power of attor- ney. So, getting charges laid or recovering the property through the courts can be challenging. But Webb says about half of the cases ACE deals with result in criminal proceedings. Often, the evidence revolves around medi- cal information proving that the elderly person was mentally in- competent when signing a mort- gage or transfer, he notes. As far as legal changes go, Webb thinks that while amendments to laws governing property title and registration have been good, he'd also like to see new rules on pow- ers of attorney. "I think that pow- ers of attorney are a little bit too easily given," he says, noting peo- ple can get and use a kit to grant such authority without seeing a lawyer. Webb would also like to see a register of people holding powers of attorney to make the system more transparent as well as see changes to a 1996 legal amendment declaring that pow- ers of attorney trump statutory guardianships. Title frauds don't happen with statutory guardian- ships, he notes. Also helpful is title insurance, which in some cases can help title Sandra Thwaites says widespread use of title insurance is a new phenomenon, meaning elderly people who bought their homes years ago often don't have it. fraud victims recover their losses. At Stewart Title Guaranty Co., for example, claims workers are seeing an increasing number of cases dealing with frauds against the elderly, says Sandra Th wait- es, vice-president for claims and compliance. Th e challenge, of course, is that the widespread use of title insurance is a relatively recent phenomenon, meaning that elderly people who bought their homes years ago often don't have it. Th waites notes insurance products will cover cases where someone has been cheated through a forgery, but seniors who are misled or who grant power of attorney to some- one who subsequently uses it to cheat them can't use that route. Lawyers, of course, have a role to play in ensuring property transactions are legal. But while some practitioners in the past have been shown to not have done due diligence in fraud cases, Webb says a new two-lawyer rule from the Law Society of Upper Canada that prevents just one lawyer from handling a property transaction is helping. He's hop- ing, then, to see some abate- ment of the problem, especially given the wide-reaching con- sequences, both fi nancial and emotional, that victims of title fraud suff er. "It's life changing and devastating," he says. LT