That's the warning issued by law-enforcement officials and investigators attending the International Fraud Investigators Conference hosted by  the Toronto Police Service this week (December 12-15).

Even though other forms of ID theft in Canada such as credit card and mass marketing fraud remain "a huge concern" for Canadians, consumers need to be vigilant about real estate-oriented fraud cases, said crime and risk management expert Chris Mathers.

"Mortgage fraud is an absolute epidemic, a huge problem in the developed countries, especially here in Canada," said Mathers, a former RCMP undercover operative, and past president of KPMG's Corporate Intelligence Inc. "And I don't see it changing anytime soon."

A four-person panel on "Mortgage Fraud: An Epidemic?" focused on this rapidly rising and increasingly common crime in Canada. The panelists, drawn from the banking, legal and insurance worlds, helped attendees discover how this lucrative criminal activity is accomplished, along with what can be done about preventing and stopping it.

The conference, which hosted police officers, detectives, consumer specialists and consultants from around the world, spent four days addressing the world's most pressing fraud issues and exploring ways to tackle them.

"There really has to be a lot of government-sponsored change here," Mathers said. "Until the banks start to complain to the government, there's not going to be any change. Once the banks start to feel it, then they will put the pressure on the various legislators to make the appropriate changes."

That's already started to happen in Ontario when coincidentally this week the provincial Liberal government passed legislation to strengthen protection for homeowners against real estate fraud.

However, the minister in charge denies the problem is a growing "epidemic" as experts claimed at the IFIC conference.

"I think that's probably too strong a language," argued Government Services Minister Gerry Phillips. "I mean it's important and we have to deal with it. I wouldn't call it an epidemic by any means."

Under Bill 152 of the Government Modernization Legislation, the Land Titles Act declares any land titles obtained by fraudulent means - such as falsified mortgages, fraudulent sale or a counterfeit power of attorney - null and void.

The legal changes also speed up financial assistance for victims of fraud, ensuring their land title is returned and a decision on compensation is made within 90 days. For the convicted criminals, the new law raises the maximum penalty for real estate fraud to $50,000 from $1,000, but does not add jail time.

Even as the government passed the bill through final reading, it sought to counter public perception about the extent of the problem of morgage fraud in Canada.

Phillips pointed out that an average of 10 cases of title fraud are reported annually in the province of Ontario. He added the number of cases has remained steady over the past few years.

Even so, the provincial government also plans to create a national database of real estate fraud cases and re-classify these types of fraud as a separate offence under the federal Criminal Code.

Title fraud in Canada, one of two main types of real estate fraud, commonly involves criminals using stolen identities or forged documents to illegally obtain a registered owner's title. The fraud artist then gets a mortgage on the property and disappears with the money.

Mortgage fraud in Canada, which usually harms financial institutions, involves a crook acquiring property and then artificially increasing its value through a series of sales and resales involving the fraud artist and a conspirator. A mortgage is then obtained based on the artificially inflated price.

But no matter which type of real estate fraud is committed against the titleholder, it can quickly escalate into a nightmare for the real owners, who are left fighting the banks for months, even years in court.

The Real Estate Council of Ontario opened 34 investigations in 2005 involving allegations of mortgage fraud, with 70 per cent of those cases resulting in revoked registrations.

But because the prospect of jail time for fraudulent crimes is minimal, if at all, the "risk-reward equation is pretty much in the favour of the criminal," said Mathers, adding that with new legislation in place now, con artists may think twice before committing real estate fraud.

"If the banks get ripped off, then the price of your bank machine transaction goes up," he said. "Everybody pays in the end."

Banks are also doing whatever they can to protect their consumers, said Maura Drew-Lytle, spokesperson for the Canadian Bankers Association.

In order to avoid becoming an unwitting participant in mortage fraud, consumers should take care to avoid signing blank documents or applications that contain false information, and businesses that offer a fee for name and credit information, she said.

"From a bank perspective, it's obviously something that we take very seriously. We're always looking at our due diligence process and trying to improve it."

The majority of people involved in mortgage fraud are innocent victims, said Toronto police Det.-Staff Insp. Stephen Harris of the city's fraud squad. "If something sounds too good to be true, it generally is," Harris said.

But most "often (victims) don't participate in it at all. It's not like they're being greedy, it's not like they're trying to get something they're not really entitled to. It's through no knowledge of their own, someone has come along, forged their identity, and is able to obtain a mortgage."

Mortage fraud victim stories and ways to prevent real estate scams from happening to you in Canada will be detailed in this ongoing series on Canadian mortgage fraud.