Archive for March, 2006

Survey finds homeowners underestimate property values

Thursday, March 23rd, 2006

British Columbians’ assessments are off by 17 per cent

Derrick Penner
Sun

British Columbia homeowners generally don’t know what they’ve got when it comes to the value of their property, according to RBC Financial’s annual homeownership report.

The survey, conducted by polling firm Ipsos Reid, found that the British Columbians guess that their homes are worth, on average, $313,370 — a 17-per-cent underestimation from the actual Canadian Real Estate Association-calculated average value of $366,882.

Nationally, the difference is a bit deeper, with Canadians estimating their homes are worth an average of $214,337, when the actual average value of a home was $258,274.

RBC forecasts that Canadians will spend $1.7 trillion on buying, building and renovating homes in 2006.

Kevin Lutz, regional manager of mortgage services for RBC, said it is understandable why it is difficult to estimate real estate values, particularly in many B.C. neighbourhoods where high demand and limited supply fuels bidding wars.

However, he added that figuring out your home’s value can be helpful.

“If people are relying on their homes for retirement [investment], there may be a lot of capital there that they don’t know about,” Lutz said.

Lutz added that homeowners could also be missing out on low-cost capital to consolidate debts at lower interest rates if they don’t realize that they have more equity in their homes than they think.

Banks generally give out their lowest interest rates on loans secured by home equity, Lutz said adding that, “it’s the cheapest way to borrow.”

However, Lutz added that people have to be cautious and should consult a financial planner to have a full financial assessment done before making such refinancing decisions.

Keith Hazell, director of financial planning at Vancity, said he advises clients to figure out their full net worth on an annual basis, which means getting an accurate valuation of your home.

Hazell said retirees who underestimate the value of their real estate may be missing out on an opportunity to downsize and use some of the capital to improve an unnecessarily meagre lifestyle.

However, Hazell added that there are considerable risks to banking too heavily on their home’s value, particularly if people are borrowing money against their homes to put into riskier investments.

“Sometimes you can be exposed to falling investment [values] or rising interest rates,” Hazell added.

“For most people . . . their home is an illiquid asset,” Hazell said.

“It’s a necessity of life, so it’s not something you are typically going to convert into cash for an income stream,” he said.

However, the RBC survey found that 38 per cent of British Columbians have borrowed money against their homes, with 20 per cent of them having refinanced their mortgages within the last year.

The survey also discovered that 89 per cent of British Columbians think their homes are a good investment, which is just a point below the 90 per cent of all Canadians who think so.

Ipsos conducted the poll in mid-January using a sample of 2,001 respondents.

The poll is considered accurate within 2.2 percentage points 19 times out of 20.

– This story can be heard online after 10:30 a.m. today at www.vancouversun.com/readaloud.

© The Vancouver Sun 2006

Turin 2006 winter olympics – Olympic Village turned green

Wednesday, March 22nd, 2006

Olympic village that housed athletes is the most visible example of the 2006 organizing committee’s commitment to sustainability

Jeff Lee
Sun

Paolo Revellino shows part of the solar arrays on the roof of the Olympic village residences. Photograph by : Ian Lindsay, Vancouver Sun

Part of the Olympic village reuses abandoned buldings of the old Mercato Generale wholesale district for shops and other facilities. Photograph by : Ian Lindsay, Vancouver Sun

The ‘green games’ standards set in Turin and the other Olympic communities are a tough act for Vancouver Whistler to follow. These colourful new buildings are part of the Olympic village residences. Photograph by : Ian Lindsay, Vancouver Sun

Marco Operto in an engineer and contractor for the Turin Olympic village residences that have many green features. Photograph by : Ian Lindsay, Vancouver Sun

TURIN – On one side of a Turin railway yard is the Lingotto Fiere, the massive former Fiat automobile factory, a testament to everything industrial in this northern Italian city.

For nearly 70 years Europe’s biggest mass-production factory pumped out millions of pollution-producing cars and trucks, and in its own right became a significant polluter.

On the other side of the tracks is an equally potent symbol of the industriousness of Italy’s architects and planners, but of a different generation.

The 39 buildings that make up the new Olympic village signify a small but important change in the city’s stature as it tries to remake itself away from its heavy-industry image.

The village is the centrepiece of a complex environmental statement by the Turin 2006 Winter Games organizing committee.

The drinking and bathing water in each of the apartments is heated by roof-top solar panels. Wide-area radiant floor heating is used instead of inefficient wall radiators, and the heat comes from a new co-generation and district heating plant at Moncalieri that now heats part of the southern neighbourhoods of Turin. The walls are insulated with recycled cellulose fibre.

Each of the buildings has also been oriented to take best advantage of the sun as it rises and sets in the south, with deep double-pane windows to trap heat. The roofs all have wide flanges for collecting water that is then funnelled into underground cisterns for recycling on to area gardens.

Paolo Revellino sees the manifestation of a relatively new Olympic ideal, the concept that environmental stewardship should be as important in the Olympics as are two other concepts, sport and culture.

Revellino, the head of sustainability assessment for the Turin Olympic Organizing Committee, and his colleague Ugo Pretato, head of environmental programs, are the main architects of Toroc’s self-described attempt to be “the greenest Games ever.”

As he stood on the rooftop of one of the village’s buildings looking at the Lingotto, Revellino explained why Toroc undertook such a lofty goal.

“I don’t think you can consider the Olympics to be just about sport any more. It has the ability to influence the way people think and to change attitudes. Turin has the opportunity to do that also in how we take care of the environment. This is an industrial city, but it is changing.”

The Olympic village is the most visible example of Toroc’s sustainability commitments. It is built on the site of another industrial legacy, the old Mercati Generali wholesale grocers market, which operated from 1934 until the early 1990s before it was moved out of the city because of complaints of pollution and noise from residents.

In 2004 most of the abandoned warehouses were torn down, but the central building was kept and renovated into a series of shops and services.

Marco Operto, the construction manager for Agencia Turin 2006, the government arm that built the village, said it represents the best that Italy has to offer for changing public attitudes.

“This is something very new for Italians,” he said. “We haven’t always been so careful about conserving energy or water.”

It has only been in the last decade that the International Olympic Committee has realized its power to change public views around the environment. In 1994, when the Lillehammer Winter Games in Norway earned high marks for being compact and environmentally friendly, the Olympic movement began to recognize it could influence the world on environmental matters.

Two years later the IOC amended its charter to include environmental stewardship, and it has used moral suasion and political clout ever since to encourage Games organizers to plan events that meet or exceed environmental standards.

For organizing committees that have to manage tight budgets, these are not inconsequential costs. Operto figures the environmental initiatives drove the $198 million Cdn project up by about five to seven per cent, but the savings will be realized within 10 years.

Toroc’s environmental statement is much broader than just the Olympic village. The committee based its environmental management program on a set of stringent principles that included minimizing the footprint of the Games, recycling waste material, monitoring and mitigating the impact of construction and operation of the facilities and using eco-efficient transportation. It also encouraged local hotels and boarding facilities to subscribe to the European Union’s Ecolabel program which sets environmental standards for accommodation.

Toroc also sought certification under both the European Union’s Eco-Management and Audit Scheme (EMAS) and ISO 14001, two voluntary programs designed around standardizing environmental management systems. Failing to comply with the certification doesn’t earn participants a fine, but it is a public embarrassment to be de-listed or criticized, Revellino said.

Toroc put together a number of high-value environmental projects to demonstrate its management principles, including the Olympic Village, three co-generation plants — two of which are at mountain venues –and a biathlon venue building that generates its own electricity with photovoltaic solar panels.

Ever since the Sydney 2000 Summer Games organizers have tried to make the events “carbon-neutral”, offsetting the greenhouse gases produced by the Games through efforts such as planting trees.

But Turin was the first Games to attempt to meet the Kyoto Protocol on greenhouse gases.

“Our goal was to offset the greenhouse gases generated by the Olympic Games,” Pretato said. “We want to be able to say we recovered the greenhouse gases between our Games and the next one in Vancouver,”

Carbon dioxide is blamed for causing global warming, and the Kyoto Protocol, which comes up for renewal in 2012, has been signed by a number of countries, including Canada, as an action plan for reducing greenhouse gases.

Pretato and his colleagues calculated that more than 121,000 tonnes of carbon dioxide would be generated by the Games, primarily from transportation and the operation of the events. It didn’t include the amount that the spectators themselves would produce.

The $7-million Cdn greenhouse gas initiative, called Project Hector (which stands for Heritage Climate Turin), is funded by the Piedmont Region and involves carbon credits generated from three low-energy district heating and two co-generation projects. The town council in Pinerolo, site of the curling venue, is also undertaking energy-saving programs that will generate carbon credits.

“I think we are expecting about 250,000 tonnes of carbon credits from these projects,” Pretato said. “Over four years we will generate more credits than were necessary for the entire Games.”

Toroc also became the first organization in Italy, and one of the first in Europe, to implement a “strategic environmental assessment.” The SEA program was mandated by Italian law and required Toroc and Agencia Turin 2006 to subject every project to set of environmental principles.

Revellino said one example of that was the snow-making facilities Toroc had to install at mountain venues. After reviewing the plans, Toroc cut the number of temporary reservoirs needed by a third.

Toroc also used methane-powered buses where possible, and electric golf carts in the village itself.

But not every program has met with success. Recycling in Italy is not widely practised and unlike the Lower Mainland, there is no curbside program. Inhabitants can take their cans, bottles and papers to communal depots, often large containers located on street boulevards. Italy also doesn’t have a container deposit system. Instead, manufacturers pay an up-front fee that is then supposed to be filtered down to municipalities which mount recycling programs.

Toroc tried to encourage a separate-at-source recycling program with its staff and at the media centres.

It put out different-coloured cardboard bins for bottles, papers, organics and plastics. In the media centres, however, they didn’t put all the containers together to offer a choice. As a result, people threw their garbage into the nearest container regardless of content.

However, Revellino said Toroc worked with suppliers to cut down the potential for waste; Coca-Cola, the corporate beverage sponsor, agreed to supply drinks only in plastic bottles that could be recycled, and McDonald’s, another sponsor, used environmentally-friendly packaging.

Food suppliers also used utensils made from corn starch instead of plastic. The only problem with that was that the corn starch, which is compostable, also breaks down under heat. Revellino said that presented problems for soup-eaters, and Toroc had to change to plastic spoons.

Turin‘s efforts have also earned high marks from the 2010 Vancouver Olympic Organizing Committee (Vanoc).

“They definitely raised the bar in environmental management and certification,” said Linda Cody, Vanoc’s vice-president of sustainability.

Cody said Vanoc is still working on its environmental management plan but has also pledged to be “carbon neutral.” Vanoc hasn’t finished a greenhouse gas audit but Cody thinks it will be less than Turin’s 121,000 tonnes because B.C. has a different energy structure.

Most of the province’s power-generation is hydro-electric. The city also uses a high proportion of electric buses and the SkyTrain and new Canada Line are also carbon-free.

BC Transit also has a proposal to have 20 hydrogen-powered buses in operation in Whistler. Vanoc will supply bus transportation between Vancouver and Whistler, reducing the amount of vehicles on the Sea-to-Sky Highway, Cody said.

Vanoc is also working on obtaining environmental certification under ISO 14001, and has also pledged to build most of its venues to a minimum LEEDS silver standard, she said. (LEEDS is a North American environmental equivalent to EMAS.)

Cody said every Olympics is different, even if the end goal in environmental sustainability is the same.

“There is no cookie-cutter plan for how you do this,” she said. “But I think we will be equally diligent in what we do.”

She said Vanoc’s map for its environmental programs will likely be ready by the end of the year.

© The Vancouver Sun 2006

Accused persons without lawyers strain justice system

Wednesday, March 22nd, 2006

Court of appeal says judges must do everything possible to help unrepresented people present their defence

Ian Mulgrew
Sun

Trials involving unrepresented defendants and the difficulties they pose for the legal system were highlighted Tuesday by a B.C. Court of Appeal ruling over a spectacular, motorcycle chase six years ago.

The three-judge panel of the province’s high bench unanimously said judges must bend over backwards to help the accused present a full defence.

Written by Justice Risa Levine, backed by colleagues Anne Rowles and Kenneth Mackenzie, the court overturned the motorcyclist’s conviction and ordered a new trial.

They said Amir Mahrokh Moghaddam, an Iranian immigrant, did not receive enough help from the Provincial Court judge who convicted him of dangerous driving.

Although the guilty verdict was later upheld by then-B.C. Supreme Court Justice Pamela Kirkpatrick, Levine said the unidentified lower court judge erred. Kirkpatrick was elevated last year to the Court of Appeal.

Cases such as this involving unrepresented participants are becoming more and more common and are an expensive nightmare.

Provincial government cuts to legal aid are mainly responsible for the increase in unrepresented defendants in the civil system.

Criminal support wasn’t affected by the cuts, but some accused are not eligible even though they cannot afford a lawyer while some are like Moghaddam, who chose to conduct his own defence.

The Legal Services Society initially provided counsel for him but that lawyer withdrew.

When the proceedings began Sept. 11, 2000, the judge offered to adjourn so counsel could be provided, but Moghaddam elected to proceed. The trial went on to squander three days of court time when a half-day should have sufficed.

In 2003, the court of appeal ordered the legal services society to pay for Moghaddam’s lawyer in the appeal court proceedings because the complexity of a criminal case today raised the question of whether he received a fair trial.

Occasionally an accused is adequately informed, but usually he or she does not have even the most rudimentary understanding of legal concepts. Mastering the substance and procedure of the law takes years.

Worse, it is not uncommon for the accused to have notions about the legal system derived from unrealistic television or movie portrayals.

A layperson, no matter how intelligent or earnest, generally is unequipped to conduct a trial.

I recently watched Mackenzie deal with an unrepresented litigant. It was an excruciating 45-minute waste of resources as the appeal justice dealt with the broke and not very bright man. A lawyer would have handled the issue in moments.

Proceedings involving lay participants usually take much longer, put more pressure on crowded dockets and are a drain on scarce legal resources.

Still, Moghaddam successfully argued before the appeal panel that the trial judge did not provide enough assistance to him so he could establish the two Mounties, the only witnesses, lacked credibility and were exaggerating.

Levine agreed for two reasons.

First, the trial judge did not allow Moghaddam to cross-examine the officers about events that that might have coloured their testimony.

Second, the judge did not explain clearly enough that Moghaddam could testify and give his version of events.

Levine thought Moghaddam could have raised a reasonable doubt about the officers’ credibility.

The court was told that on Sept. 17, 1999, at about 8 a.m., a Mountie on routine patrol saw a motorcycle stopped in a no-stopping area in front of an elementary school.

He pulled over and got out of his cruiser, gesturing to the motorcyclist on the other side of the street. But the motorcycle sped away.

The Mountie gave chase and was soon joined by another cruiser.

The two officers described the motorcyclist driving at high speeds, failing to stop at two lights, travelling the wrong way on a one-way street and thus forcing other vehicles to take evasive action, driving through a shopping centre parking lot and forcing pedestrians to scatter, and escaping on foot when six police cars had him surrounded.

The total pursuit lasted about 30 minutes, ending in Moghaddam’s arrest after a short foot chase.

At the station, Moghaddam’s face was rammed up against a glass partition by one of the cops. Moghaddam later confessed.

Moghaddam alleged he was beaten by the officers, had no contact with counsel and was intimidated into his admissions.

At the trial, an interpreter was sworn to translate the proceedings from English to Farsi; nevertheless, much was conducted without translation.

From the transcript, Levine said Moghaddam’s English clearly was not fluent, but he made himself understood.

In the cross-examination of the officers he did conduct, Moghaddam was fairly effective in pointing out inconsistencies between their evidence and their report to Crown counsel.

On Jan. 30, 2000, eight months before the Provincial Court trial, one of the Mounties went to Moghaddam’s home and left Moghaddam requiring 13 stitches to his head.

The officer was formally reprimanded.

Moghaddam should have been allowed to tell the court about that incident, Levine said.

“For that reason alone, I would allow the appeal,” she wrote.

Hard to disagree — this ruling, however, underscores not only the heavy expectations being placed on judges because of unrepresented defendants, but also the concomitant costs.

© The Vancouver Sun 2006

Saltspring Island on the Gulf Islands – local government bans rentals – hotels & bed & Breakfast complain

Wednesday, March 22nd, 2006

Income helps island residents, but is seen as unfair competition by some

Gerry Bellett
Sun

Saltspring Island‘s local government is cracking down on property owners who rent their summer homes and cottages to vacationers, after complaints from commercial hotel and bed-and-breakfast operators that they are facing unfair competition.

Wayne Quinn, Islands Trust director of local planning, said Tuesday that renting out a home that is zoned residential is not permitted under the island’s zoning bylaw. Such activity is only allowed on properties zoned commercial, he said.

It’s been a problem for years and has affected many Gulf islands, with some banning short-term holiday rentals of residential property, while others, such as South Pender, allow it.

Gabriola Island takes the middle position and is working on allowing rentals, provided the homeowner takes out a temporary use permit that could cost $800.

Saltspring has decided against that route.

“The currently elected trust committee has determined it’s not something they want to allow,” said Quinn who has been asked by the committee to enforce the ban.

He said he’s not sure how many illegal holiday homes were being operated on Saltspring but expects it might be a couple of hundred.

“We’re running a forum on managing tourism growth within a few weeks and I expect we’ll have people on both sides speaking out,” he said.

He said the unofficial tourist income received by some home-owners helps see them through the year.

“On the mainland, people usually have one job but on the islands some people would say that it [renting out their home] was vital to their being able to live here,” said Quinn.

As for enforcement of the bylaw, Quinn said he is waiting for political direction as to when to begin.

“Right now we’re working on a strategy. Should enforcement be this year or next year? People might have taken bookings and the holiday season is almost upon us,” he said.

But he wouldn’t be surprised if the issue ends up with the bylaw being challenged in court, he said.

Meanwhile, Elly Hallam, who runs a holiday rental business on Gabriola, warns that any crackdown on holiday home rentals will seriously impact the islands’ economies.

“Tourism will be reduced and the fragile economies of these islands will be shattered,” Hallam said.

She rents out 20 homes and one small island — Breakwater Island — on Gabriola which rent from $650 to $2,000 a week, with Breakwater Island going for $4,000 a week.

“Last year we rented to 148 families, each with an average of 4.4 people.

These are the people who buy the paintings and sculptures from artists and who spend money in the farmer’s market — it’s not the locals who do that,” she said.

“I find it ironic that they are trying to reduce tourism at a time when the Liberal government is pushing tourism for the 2010 Olympics,” said Hallam.

© The Vancouver Sun 2006

Real Estate costs make Vancouver Canada’s most expensive city

Wednesday, March 22nd, 2006

Real estate costs make this Canada’s most expensive city to locate a firm

Derrick Penner
Sun

Vancouver‘s high-priced real estate is helping to make the city the highest-cost place in Canada to locate a business, the accounting and consulting firm KPMG reported in its latest Competitive Alternatives survey.

Vancouver scored 96.9 on KPMG’s index scale, which considered 27 cost components of setting up a business, just behind Toronto at 96.5. Sherbrooke had the lowest-cost score at 90.1.

“One [factor] is to do with property prices,” said Glenn Mair, project director for MMK Consulting, which was involved with KPMG in conducting the study. “Land costs are relatively expensive in Vancouver.”

Mair added that higher construction costs, which push up prices of new buildings, and wages that are relatively higher to compensate for Vancouver’s higher cost of living all contribute to the higher ranking.

Mair said those high costs put Vancouver in a tough fight on Canada’s “east/west axis” with Edmonton (index score of 93.3) and Montreal (94.3) in attracting investment dollars from companies that want to locate in Canada and don’t care where.

However, on the bright side, Mair noted that on the “north/south axis” including the United States, Vancouver is the cheapest West Coast city in which to set up shop.

And Canada as a whole scored as the second least-expensive country in which to set up a company, just behind Singapore.

The KPMG index used the United States as its benchmark, with the average U.S. cost to set up a company equaling 100. KPMG noted that Canada maintained its advantage to the U.S. despite its rapidly appreciating currency.

“Typically, we do see a premium being paid [to locate] on the West Coast,” Mair said. “All the U.S. cities on the West Coast have business costs above the U.S. average.”

On average, the survey found Vancouver maintains a 5.5-per-cent cost advantage to its West Coast competitors.

However, in research-and-development-related business Vancouver’s advantage expands to seven to 10 per cent cheaper, and in software development it widens further to 15 per cent cheaper over the U.S.

Mark MacDonald, KPMG’s director for the Competitive Alternatives survey, added that the firm found, in recent work for the provincial Ministry of Economic Development, that B.C.’s principal trade links are strongly aligned north to south.

Mair said that while Vancouver is “absolutely more expensive . . . there are other considerations” in picking a city to locate a new business.

Mair added that while Calgary might be cheaper than Vancouver on a cost basis, Vancouver might have quality of life factors that weigh in its favour.

MacDonald said KPMG conducts the survey to give its clients an objective piece of information to use in making investment decisions. He added that it is also a tool government that economic development officials can use to guide policies.

Mair said policies that affect land costs would be one area for governments to focus on to improve Vancouver’s competitive advantage.

KPMG surveyed 128 cities in nine nations including all G7 countries plus Singapore and the Netherlands.

Richmond fires back at Sun over oval

Wednesday, March 22nd, 2006

Olympic facility on time, on budget and has a strong future, mayor insists

Jonathan Fowlie
Sun

RICHMOND – The planned Olympic $178-million speed-skating oval is on time, on budget and has a strong future as both a community and high-performance sporting venue, Richmond Mayor Malcolm Brodie said Tuesday night.

“This project is on track,” Brodie told reporters. “We have a vision that we will have a speed-skating oval for the 2010 Winter Games and after that we will have a community use and high-performance sport [facility].”

Brodie was speaking after a public committee meeting where council members addressed recent media reports about the future of the oval, and took repeated shots at the coverage.

Last week The Vancouver Sun reported on a geotechnical report in which experts warned there is “considerable risk” the soil beneath the oval will shift.

The report suggested this shifting could happen to such a degree that within 10 years of the Games, the venue will no longer meet the International Skating Union’s criteria for holding speed-skating events.

The story was picked up by numerous media outlets and reported widely.

Throughout Tuesday’s meeting, councillors called the reporting on the issue “sensational” and “extremely irresponsible.”

“This is reckless reporting,” said Coun. Derek Dang. “This has really hurt Richmond.”

After the meeting, Richmond’s director of major projects Greg Scott said the information from the geotechnical report is part of a larger body of information and should not be read to mean the facility will necessarily be rendered useless as a speed-skating oval if the soil settles.

Scott said if the building settles after construction, there are ways to make adjustments.

“If it [the building] tips a couple of millimetres at one end, then there are opportunities where we could put coatings or leave it the way it is and you can build it with thicker ice,” he said, adding the soil issues at the site are similar to those in building sites across Richmond.

Brodie said the issue has been overblown in the media. He said Richmond had never planned to use the facility primarily as a long-track speed-skating oval after the Games, but always intended to convert it into a sporting facility for both high-performance athletes and members of the community.

“The only time that will be used as a long-track speed-skating oval would be very occasionally,” he said.

During the meeting, Coun. Harold Steves said he does not blame the media for the story.

“I think the reason we’ve got reporting like this is simply because of our penchant for secrecy and we’ve got only ourselves to blame for that,” he said.

“We’ve heard a lot from our council tonight saying we have done our due diligence and I agree that we have, but I think that partly because we have been worried about the IOC and everybody else looking over our shoulders … we got ourselves into this trouble,” he added.

He made the comment as council was debating a motion to compile a list of public documents and motions pertaining to the Olympic oval so it would be easier for people to get information on the project.

That motion carried with unanimous support.

Richmond has also attracted media attention over the amount of money it spent studying other Olympic ovals. Besides spending more than $115,000 to send representatives to the Games in Italy last month, it has spent more than $459,000 over the last two years travelling to former Olympic cities.

© The Vancouver Sun 2006

Mortgage fraud hits $1.5b a year in Canada

Monday, March 20th, 2006

Easy to do, often lucrative, real estate agents say it is growing quickly across Canada

Mario Toneguzzi
Sun

Gordon Altman, a private mortgage lender, was victimized by a fraud artist who illegally got title to a property. Photograph by : Steve Bosch, Vancouver Sun Files

CALGARY — Mortgage fraud has become a billion-dollar industry in Canada and a growing concern to the real estate and financial sectors.

Although difficult to put an exact number on, organizations such as the Quebec Association of Real Estate Agents and Brokers suggest the criminal activity amounts to an estimated $1.5 billion a year across the country.

“We believe that only criminal prosecution of mortgage fraud will deter unscrupulous operators in the marketplace,” said Bev Andre, chairwoman of the Real Estate Council of Alberta, “and that only through prosecution can those who commit fraud be made to bear its costs.”

Ron Esch, executive vice-president of the Calgary Real Estate Board, calls mortgage fraud a “huge problem because it does involve a lot of money — ill-gotten gains.”

“It’s relatively easy to commit mortgage fraud,” said Esch. “Obviously you’re doing a criminal act but it’s a criminal act not that difficult to do.”

In B.C., independent mortgage lender Gordon Altman gave an elderly White Rock man a $250,000 mortgage against a $500,000 house he said he planned to sell.

The man and his identification had already been verified by a lawyer who provided legal advice, and by a mortgage broker known to Altman.

It wasn’t until Altman checked with the White Rock realtor who was handling the listing that he discovered the man didn’t own the house and had fooled them all in a brazen scam.

When Altman told the realtor he held a mortgage against the property, she said that would have been impossible.

“She said ‘There is no mortgage, and couldn’t be because the owner is dead,’ ” Altman said in an interview.

Mortgage fraud occurs in two ways.

– The first involves individuals fabricating their qualifications for a mortgage when buying a house.

– The second involves fraud for profit — a growing concern — where someone intentionally defrauds a lender or a homeowner of their interest in a property.

The latter is often accomplished by identity theft. Ownership of a property is transferred fraudulently from the rightful owner to the criminal who then sells or mortgages that interest and makes off with the funds.

The problem is becoming more prevalent as technology makes it easier to falsify documents and create identities, say experts in the field.

“It’s huge,” says Det. Robbie Robertson of the commercial crime unit with the Calgary Police Service. “I’ve been aware of it for over three years . . . There’s a huge, huge effect of this.”

For example, following a six-month investigation last fall, the police commercial crime unit in conjunction with Alberta Government Services charged Lloyd Lewis Mason, 33, of Calgary, with one count of fraud and one count of fraud in relation to making a false registration of title.

The case involved the unlawful transfer of a title to a property to another person without the knowledge of the true owner. That person then took out an almost $110,000 mortgage on the property.

The fraud came to light when the true owner attempted to pay property taxes and the City of Calgary notified them that they no longer owned the property.

This was a case of identity theft where the object of the stolen identity was to fraudulently obtain mortgage money.

According to Alberta Justice, the accused was recently convicted and sentenced to four years in prison and ordered to make restitution of $109,905.

Wayne Proctor, regional director, Pacific region for First Canadian Title (a title insurer), said the magnitude of the problem is a rough guess because most of the fraud victims are mortgage lenders and in a lot of cases they may suffer a loss and may not know it’s mortgage fraud or not specifically identify it as mortgage fraud.

“The rough estimate of the problem that the Canadian Institute of Mortgage Brokers and Lenders made a few years ago was $300 million,” said Proctor. “But there’s more recent estimates that would indicate it’s probably closer to a billion dollars.

“In our discussions with regulators, with mortgage brokers and realtors and others connected to the real estate industry, it is pretty well a consensus that it is a growing problem. One of the reasons could be the awareness of potential fraudsters that this is a relatively easy fraud to commit. The payoff is very large as compared to other types of minor crime.”

Esch said there needs to be more resources committed to the problem here and more “serious jail time” for those convicted of mortgage fraud.

“The problem won’t go away until there are more checks and balances put in place,” Esch said.

– – –

Real estate fraud developments

– First Canadian Title estimates the average case of real estate fraud to be in the range of $300,000 while in comparison the RCMP estimates the average credit-card fraud case in Canada to average about $1,200.

– In 2000, real estate-title fraud claims accounted for only six per cent of total dollars paid in claims at First Canadian Title.

By 2005, that number reached 33 per cent.

– Law-enforcement officials and lenders believe that 10 to 15 per cent of all mortgage applications contain false information.

– According to the Quebec Association of Real Estate Agents and Brokers, mortgage fraud amounts to an estimated $1.5 billion a year in Canada.

– The Real Estate Council of Alberta estimates there were about $275 million in fraudulent mortgage loans in Alberta in the 2001-2002 fiscal year based on transactions investigated.

Source: First Canadian Title and Real Estate Council of Alberta

© The Vancouver Sun 2006

Internet data theft reaches new level of sophistication

Monday, March 20th, 2006

Software developed by pros, so thieves need no training

BRIAN KREBS
Sun

ONLINE FRAUD I When Graeme Frost received an e-mail notice that an expensive camera had been charged to his credit card account, he immediately clicked on the Internet link included in the message that said it would allow him to dispute the charge.
   As the 29-year-old resident of southwestern England scoured the resulting Web page for the merchant’s phone number, the site silently installed a passwordstealing program that transmitted all of his personal and financial information.
   Frost is just one of thousands of victims whose personal data has been stolen by what security experts are calling one of the more brazen and sophisticated Internet fraud rings ever.
   The Web-based softwa re employed by ring members to manage large numbers of illegally commandeered computers is just as easy to use as basic commercial office programs. No knowledge of computer programming or hacking techniques is required to operate the software, which allows the user to infiltrate and steal financial information from thousands of PCs simultaneously.
   The quality of the software tools cyber criminals are using to sort through the mountains of information they’ve stolen is a clear sign that they are seeking more efficient ways to use stolen data, experts say.
   “We believe this to be the work of a group, not a single person,” said Vincent Weafer, senior director of security response at Cupertino, Calif.-based computer security giant Symantec Corp.
   The data thieves use the IE flaw to install programs known as “keyloggers” on computers that visit the specially coded Web pages. The keyloggers then copy the victims’ stored passwords and computer keystrokes and upload that information to a database.

Internet data theft reaches new level of sophistication

Monday, March 20th, 2006

Software developed by pros, so thieves need no training

BRIAN KREBS
Sun

ONLINE FRAUD I When Graeme Frost received an e-mail notice that an expensive camera had been charged to his credit card account, he immediately clicked on the Internet link included in the message that said it would allow him to dispute the charge.
   As the 29-year-old resident of southwestern England scoured the resulting Web page for the merchant’s phone number, the site silently installed a passwordstealing program that transmitted all of his personal and financial information.
   Frost is just one of thousands of victims whose personal data has been stolen by what security experts are calling one of the more brazen and sophisticated Internet fraud rings ever.
   The Web-based softwa re employed by ring members to manage large numbers of illegally commandeered computers is just as easy to use as basic commercial office programs. No knowledge of computer programming or hacking techniques is required to operate the software, which allows the user to infiltrate and steal financial information from thousands of PCs simultaneously.
   The quality of the software tools cyber criminals are using to sort through the mountains of information they’ve stolen is a clear sign that they are seeking more efficient ways to use stolen data, experts say.
   “We believe this to be the work of a group, not a single person,” said Vincent Weafer, senior director of security response at Cupertino, Calif.-based computer security giant Symantec Corp.
   The data thieves use the IE flaw to install programs known as “keyloggers” on computers that visit the specially coded Web pages. The keyloggers then copy the victims’ stored passwords and computer keystrokes and upload that information to a database.

Mortgage fraud hits $1.5b a year in Canada

Monday, March 20th, 2006

Easy to do, often lucrative, real estate agents say it is growing quickly across Canada

Mario Toneguzzi
Sun

Gordon Altman, a private mortgage lender, was victimized by a fraud artist who illegally got title to a property. Photograph by : Steve Bosch, Vancouver Sun Files

CALGARY — Mortgage fraud has become a billion-dollar industry in Canada and a growing concern to the real estate and financial sectors.

Although difficult to put an exact number on, organizations such as the Quebec Association of Real Estate Agents and Brokers suggest the criminal activity amounts to an estimated $1.5 billion a year across the country.

“We believe that only criminal prosecution of mortgage fraud will deter unscrupulous operators in the marketplace,” said Bev Andre, chairwoman of the Real Estate Council of Alberta, “and that only through prosecution can those who commit fraud be made to bear its costs.”

Ron Esch, executive vice-president of the Calgary Real Estate Board, calls mortgage fraud a “huge problem because it does involve a lot of money — ill-gotten gains.”

“It’s relatively easy to commit mortgage fraud,” said Esch. “Obviously you’re doing a criminal act but it’s a criminal act not that difficult to do.”

In B.C., independent mortgage lender Gordon Altman gave an elderly White Rock man a $250,000 mortgage against a $500,000 house he said he planned to sell.

The man and his identification had already been verified by a lawyer who provided legal advice, and by a mortgage broker known to Altman.

It wasn’t until Altman checked with the White Rock realtor who was handling the listing that he discovered the man didn’t own the house and had fooled them all in a brazen scam.

When Altman told the realtor he held a mortgage against the property, she said that would have been impossible.

“She said ‘There is no mortgage, and couldn’t be because the owner is dead,’ ” Altman said in an interview.

Mortgage fraud occurs in two ways.

– The first involves individuals fabricating their qualifications for a mortgage when buying a house.

– The second involves fraud for profit — a growing concern — where someone intentionally defrauds a lender or a homeowner of their interest in a property.

The latter is often accomplished by identity theft. Ownership of a property is transferred fraudulently from the rightful owner to the criminal who then sells or mortgages that interest and makes off with the funds.

The problem is becoming more prevalent as technology makes it easier to falsify documents and create identities, say experts in the field.

“It’s huge,” says Det. Robbie Robertson of the commercial crime unit with the Calgary Police Service. “I’ve been aware of it for over three years . . . There’s a huge, huge effect of this.”

For example, following a six-month investigation last fall, the police commercial crime unit in conjunction with Alberta Government Services charged Lloyd Lewis Mason, 33, of Calgary, with one count of fraud and one count of fraud in relation to making a false registration of title.

The case involved the unlawful transfer of a title to a property to another person without the knowledge of the true owner. That person then took out an almost $110,000 mortgage on the property.

The fraud came to light when the true owner attempted to pay property taxes and the City of Calgary notified them that they no longer owned the property.

This was a case of identity theft where the object of the stolen identity was to fraudulently obtain mortgage money.

According to Alberta Justice, the accused was recently convicted and sentenced to four years in prison and ordered to make restitution of $109,905.

Wayne Proctor, regional director, Pacific region for First Canadian Title (a title insurer), said the magnitude of the problem is a rough guess because most of the fraud victims are mortgage lenders and in a lot of cases they may suffer a loss and may not know it’s mortgage fraud or not specifically identify it as mortgage fraud.

“The rough estimate of the problem that the Canadian Institute of Mortgage Brokers and Lenders made a few years ago was $300 million,” said Proctor. “But there’s more recent estimates that would indicate it’s probably closer to a billion dollars.

“In our discussions with regulators, with mortgage brokers and realtors and others connected to the real estate industry, it is pretty well a consensus that it is a growing problem. One of the reasons could be the awareness of potential fraudsters that this is a relatively easy fraud to commit. The payoff is very large as compared to other types of minor crime.”

Esch said there needs to be more resources committed to the problem here and more “serious jail time” for those convicted of mortgage fraud.

“The problem won’t go away until there are more checks and balances put in place,” Esch said.

– – –

Real estate fraud developments

– First Canadian Title estimates the average case of real estate fraud to be in the range of $300,000 while in comparison the RCMP estimates the average credit-card fraud case in Canada to average about $1,200.

– In 2000, real estate-title fraud claims accounted for only six per cent of total dollars paid in claims at First Canadian Title.

By 2005, that number reached 33 per cent.

– Law-enforcement officials and lenders believe that 10 to 15 per cent of all mortgage applications contain false information.

– According to the Quebec Association of Real Estate Agents and Brokers, mortgage fraud amounts to an estimated $1.5 billion a year in Canada.

– The Real Estate Council of Alberta estimates there were about $275 million in fraudulent mortgage loans in Alberta in the 2001-2002 fiscal year based on transactions investigated.

Source: First Canadian Title and Real Estate Council of Alberta

© The Vancouver Sun 2006