Real Estate Council of Alberta Fundamentals Practice Exam

What type of fraud may involve collusion between parties to falsify transactions?

1. Private financing scheme

2. Title fraud

3. Equity access

4. Seller financing scheme

The correct answer is: Title fraud

Title fraud is the correct choice as it specifically involves the illegal transfer of property ownership without the consent of the rightful owner. In cases of title fraud, parties may collude to create false documents or misrepresent the ownership status of a property, thereby falsifying transactions. This can include forging signatures, creating fictitious identities, or manipulating property records to facilitate the transfer of the title. Understanding title fraud as a scheme of deceit highlights the serious implications it has on the integrity of property transactions. The collaboration between individuals in such fraudulent activities significantly undermines the trust that is essential in real estate dealings, posing risks not only to the affected owners but also to the overall real estate market. The other options present different types of financing or schemes that do not primarily rely on collusion to falsify transactions. For instance, private financing schemes and seller financing schemes typically involve legitimate agreements between buyers and sellers, even if they may carry risks or disadvantages for the parties involved. Equity access can refer to legitimate methods of leveraging property equity without necessarily involving fraudulent activities. Therefore, the distinct characteristic of collusion and falsification present in title fraud makes it the correct answer.