Identity thieves who attempt to steal houses from under their owners could soon face fines of up to $50,000 in Ontario.

Government Services Minister Gerry Phillips has announced plans to introduce a bill this fall to increase the maximum penalty for real estate fraud from $1,000 to $50,000.

"Our proposed legislative amendment, if it passes, will ensure that mortgages, transfers, powers of attorney and other instruments obtained by fraud would be nullified," he said.

He also called Friday on the federal government to consider amending the Criminal Code to recognize real estate fraud as a separate offence, and establish a national database of cases.

Thieves take $300K mortgage

The call is in response to cases such as that of North York resident Susan Lawrence, who lost her home of 30 years when thieves sold the house without her even realizing it.

Someone pretending to be Lawrence sold the home to a buyer who got a $300,000 mortgage, then disappeared.

'I still don't have it back. I've got the house back, I've got the title back. But I have to get the mortgage discharged.-Fraud victim Susan Lawrence

She discovered the fraud when the bank holding her mortgage came to evict her from her 100-year-old Victorian home in the Toronto area.

While she managed to reverse the eviction notice, she is still in legal wrangling over the mortgage.

"I still don't have it back. I've got the house back, I've got the title back," she said. "But I have to get the mortgage discharged."

Lawrence is suing the bank that issued the mortgage to the thieves.

10 claims a year

Phillips said the Ontario government has already taken preventive steps such as making drivers licences more secure and creating a land title insurance fund, which provides last-resort financial support for victims.

Only 10 claims, amounting to less than $1 million, are made a year against the fund out of two million real estate transactions in Ontario, said Phillips. 

Those numbers don't reflect all the claims made on title insurance to private companies, and Phillips notes that homeowners and authorities tell him title and mortgage fraud is a growing problem.

Meanwhile, the new bill won't help Lawrence since it won't be retroactive, but Phillips said at least it will prevent similar cases.

The province is also seeking intervener status to help Lawrence win her fight.