Imagine coming home and finding your house had been stolen! Hard to believe? That's the real threat Canadian homeowners are facing every day with mortgage fraud on the rise in Canada.

In this three part series, I'm examining a Canadian criminal trend that one investigative expert calls an "epidemic" - mortgage fraud in Canada. For victims of this crime, it can be devastating.

Ravi Raina, who immigrated here with his family and bought his  Canadian dream home, lost ownership of his $650,000 Toronto house to a clever con man and a legal loophole using "title fraud."

Victor and Barbara Hanisch were conned out of their Winnipeg home with a more complicated "title transfer fraud."

In both cases, it took a lot of time and money to sort out the legal and financial difficulties caused by these classic variations of mortgage fraud in Canada.

Their sad stories are just two examples of thousands of mortgage frauds committed on Canadians by inventive identity thieves and cunning con artists, abetted by negligent lenders and apathetic politicians.

So how did these Canadians resolve the mortgage frauds committed against them?

Ravi Raina's legal bills surpassed $33,000. His wife was hospitalized for depression. And the lenders, who gave the con artist two new mortgages on the Rainas' house, threatened to seize the house to get their money back, even though those debts were fraudulently created.

Appeal Lawyer Bernard Gasee says it took a dozen lawyers to work out a resolution. "It caused financial stress, business stress, marital difficulties, psychiatric difficulty, tremendous anxiety, insecurity. Usually in most cases it's the families biggest asset."

In the end, the lenders stopped trying to get money from the Rainas. An Ontario provincial fund set up to compensate victims of real estate fraud reimbursed the lenders for all the mortgages plus interest. And their legal fees were also fully covered.

The Rainas and the other victims of Tesoro's fraud were offered $10,000 each. For Raina, that was nowhere near enough to cover his legal fees, let alone to make up for his lost business.

After three years, the Rainas still haven't got their title back. They blame Tesoro - but they also blame the system.

Ravi Raina says the government could do a few more checks before rubber-stamping a change in ownership - like making sure the signatures match a previous document.

The Ontario government says it's a question of balance. Kate Murray is with the Ontario Land Title Registry Office.

"We constantly look at our procedures, the process documents and what we do with them. We are also in the process of automating what we do and introducing an electronic system."

Murray also suggested the mortgage lenders should be more rigorous. Marketplace asked all four companies that gave mortgages to Emanuele Tesoro for an interview, but none of them would talk to us on camera.

'There is a problem in this industry'

Michael Beckette did. He runs the Canadian Institute of Mortgage Brokers and Lenders.

"I think we recognize the fact there is a problem in this industry."

Beckette's association has proposed a few voluntary changes:

    * More documents to be checked
    * Ensure signatures are checked for forgeries
    * No drive-by appraisals

Beckette concedes the changes haven't been made yet. But he says the CIMBL is working hard to make sure it happens.

Police eventually tracked down Tesoro in Italy. He returned to Canada to face 33 fraud-related charges. He was sentenced to 38 months in prison. He served eight months. None of the money has been recovered.