Real Estate Council of Alberta Fundamentals Practice Exam

Which of the following describes identity theft in relation to mortgage fraud?

1. Stealing documents from a homeowner to sell their property

2. Using someone else's identification to obtain financing

3. Creating fake identities for multiple loan applications

4. Acquiring someone's real estate records without permission

The correct answer is: Using someone else's identification to obtain financing

In the context of mortgage fraud, identity theft specifically involves the unauthorized use of someone else's personal information. This often manifests as using another person's identification to fraudulently secure financing for a mortgage. The core of this act lies in the assumption of another person's financial identity, which allows the perpetrator to take out loans or mortgages without the victim's knowledge or consent. This is particularly risky for consumers, as it can lead to significant financial repercussions for the victim and pose challenges in rectifying their credit history and financial standing. The other options describe scenarios that relate to property fraud or tampering but do not accurately capture the essence of identity theft. For instance, stealing documents from a homeowner involves direct manipulation of existing property rights rather than impersonation. Creating fake identities introduces a different layer of deception which can involve multiple fraud schemes, but it isn't strictly limited to identity theft. Lastly, acquiring someone's real estate records without permission involves unauthorized access to information but does not address the misuse of identity that characterizes identity theft. Thus, using someone else’s identification to obtain financing best encapsulates the fraudulent acts associated with identity theft in the context of mortgage fraud.