Real Estate Fraud in Canada
On the heels of news that the Law Society of British Columbia has approved $32,500,000.00 in payments to cover consumer claims in a real estate fraud case involving former Vancouver lawyer Martin Wirick, the Canada Mortgage and Housing Corporation (CMHC)–which holds its 2006 Housing Outlook Conference today in Saskatoon, Saskatchewan–has announced that it is stepping up its own efforts in the fight against real estate and mortgage fraud. According to CMHC, Marie Dyck, Senior Advisor on Fraud in CMHC’s Insurance and Securitization Sector will present in depth information to the conference’s attendees later today on current trends in mortgage fraud and how lenders can protect themselves and their customers.
The story of Martin Wirick first came to light in May 2002. Wirick worked on behalf of Vancouver real estate developer Tarsem Gill on the sale of numerous properties. At the time of his resignation, Wirick admitted that he had misappropriated trust funds in real estate transactions by failing to pay out and discharge mortgages, and had instead applied the funds to other purposes, which were clearly in breach of the law. The Law Society immediately took steps to protect Wirick’s clients and other affected parties. They conducted an audit and investigation, sought the appointment of a custodian for Wirick’s legal practice, and ensured that the claims of innocent homeowners were given priority consideration. January’s announcement that the Law Society’s Special Compensation Fund Committee had completed its review of 555 innocent homeowners’ claims resulted in $32,500,000.00 in payments to cover Wirick’s fraudulent activities.
The Quebec Association of Real Estate Agents and Brokers estimates that mortgage fraud losses in Canada are nearly $1.5 billion per year, while the Real Estate Council of Alberta’s own measurement of fraud over a recent 12 month period discovered 2,700 occurrences in Alberta alone. And get this… according to Susan Leslie, Vice President of Claims and Underwriting for First Canadian Title, in 2004, mortgage fraud accounted for thirty-six percent (36) of the claims her company paid, whereas in 2000, that number was closer to fifteen percent (15%).
Clearly, real estate fraud is alive and well in Canada.