As more real estate investors turn to alternative vehicles to generate cash, they have been warned about increasing fraud cases.
A number of investors in the Ontario region collectively lost almost $200,000 in a private mortgage investing fund. The broker who orchestrated the fund, independent of her affiliated company, was found dead last month.
The death of the broker has led to a number of allegations that she mismanaged the mortgage investment fund. Police are calling her death “unsuspicious.”
One of the clients, Tammy Robinson, alleges that the broker encouraged him and others to invest in short-term mortgages, ostensibly for bridge financing and with the promise of returns as high as 15 per cent. He was also given signing bonuses.
The terms of those loans were outlined in promissory notes, says one investor, and while his earlier investments met his expectations, more recent ones -- for a total of $90K -- did not.
The investor would ultimately report Robinson to the OPP, after a lawyer's letter failed to win a return of the funds.
Most recently, it was revealed that ‘title theft’ is also on the rise in Canada. This sophisticated system involves fraudsters creating fake documents, taking over the title of properties and remortgaging or selling it unknown to the owner.
Industry experts say that in the case of the mortgage being paid off, home owners should acquire title insurance to protect the owners and the property.
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Investors, beware of who you do business with or you may end up losing a lot of cash or worse, your property.