USE A LICENSED REAL ESTATE BROKER (Friday, April 27, 2007)

Use the services of a licensed real estate brokerage.

In order to assist another person in a real estate purchase or sale in Alberta, a licence is required. Real estate brokerages and industry members must be licensed by the Real Estate Council of Alberta (RECA) and comply with the Real Estate Act. Consumers are protected when they deal with a licensed individual for several reasons:

Education: To become licensed, an individual must complete a real estate course and pass an exam.
Insurance: An individual must have errors and omissions insurance to quality for an Alberta real estate licence.
Assurance Fund: Consumers are protected against any loss arising from frauds or breach of trust by a licensed real estate industry member through the Real Estate Assurance Fund, a fund financially supported by all industry members.
Standards: When an industry member conducts business, they must adhere to business standards and comply with Rules designed to protect consumers.
Supervision: A licensed real estate industry member must be registered with a licensed brokerage and can only trade on behalf of that brokerage. In accordance with the Real Estate Act, the broker supervises the business conduct of all the industry members registered with the brokerage and ensures the business of the brokerage complies with the laws of Alberta. Many of these laws are designed to protect consumers.

A consumer who deals with an unlicensed individual does NOT have these safeguards.

(article excerpt from the Real Estate Council of Alberta)

MORTGAGE FRAUD (Friday, April 27, 2007)

Mortgage Fraud is a problem the Real Estate Council of Alberta (RECA) takes seriously. Many Alberta residents have been lured by promises of big returns and became victims of mortgage fraud. Others have unknowingly committed a fraudulent act to the benefit of a fraud mastermind. Many have bought properties whose values have been over inflated by a series of fraudulent transactions. These events and more have resulted in many consumers experiencing huge financial losses and ruined credit ratings.

Mortgage fraud is defined as:

“The material misstatement, misrepresentation or omission relied upon by an underwriter or lender to fund, purchase or insure a mortgage loan.” - Canadian Institute of Mortgage Brokers and Lenders

The terms “misstatements, misrepresentations and omissions” are more simply defined as lies. This includes so called “white” lies. If a lender advances mortgage money based on lies told about items such as the borrower’s income, the property’s value, the intended use of the property, and so on, a mortgage fraud has occurred.

Mortgage fraud is a crime. If you are approached about a scheme to make quick, easy money in real estate or asked to use your name for credit purposes, or asked to create or alter certain documents in a real estate or mortgage transaction – be suspicious. If you suspect you may be getting involved in a fraudulent transaction, report your suspicions to the Real Estate Council of Alberta.

Be informed and you can protect yourself from devastating effects of mortgage fraud.

(article excerpt from the Real Estate Council of Alberta)