There has been a recent uptick in the cases of mortgage fraud in Canada and both lenders and brokers should take steps to ensure that they’re a step ahead of the fraudsters at all times.
A Growing Concern
Equifax reported in February that Canadians have a growing concern about the possibility of being involved in mortgage fraud according to their survey; with only 45% saying that they trusted their broker to fill up the necessary forms on their behalf and 29% sharing that they are not sure what to do in such an instance. 79% think that lenders should take more measures to protect them against the misuse of data for identity and fraud while 40% said that they worry that their information could be taken by scammers to get loans under their names.
With the above said, “the responsibility to make sure that information shared by clients stays in safe hands falls on mortgage professionals. Mortgage professionals should take all possible measures to make sure that their brokers and other staff will protect sensitive information like this at all times” says Danny Smith with Homebase Mortgages.
Beware of Fraudulent Private Lenders
One alarming trend that is occurring recently is that there are scam artists who pose as private lenders and charge a non-refundable commitment fee plus possibly also steal data without any intention of coming through with the transaction. Michael Porter a private investigator with Haywood Hunt & Associates in Mississauga says “the fraudulent private lenders go to the borrowers and offer better rates with the clause that there is a non-refundable commitment fee that’s usually in the thousands. Afterwards, they never close any deal with any borrower who chose to talk with them”.
It is important to be wary of these fraudulent private lenders when trying to find a way to get approved for private mortgages from non-bank or non-institutional lenders. Due diligence is a must otherwise you could end up saying goodbye to huge fees that never go to anything because the intent to deceive was there from the beginning.
Mortgage brokers should make sure that they only choose private lenders who are trustworthy and do not charge hidden fees or fees that cannot be refunded for any undisclosed reason.
Beware of Fraudulent Data
With the above said about private lenders who have ill intentions, mortgage brokers should likewise make sure that they keep their eyes peeled for possible fraudulent data or information given by those who are trying to borrow says Calvin Barry a criminal lawyer in Toronto. It is not uncommon for people to lie and falsify their letters of employment, information on their debt, job status, as well as mortgage status and more.
What Brokers Should Know About Mortgage Fraud
Mortgage fraud is everywhere. Both private lenders and borrowers can find ways to fraud existing systems and fool mortgage brokers. Mortgage brokers should take the time to know their clients better and conduct background checks for new clients. A client who is hesitant or unwilling to give important information is possibly guilty of fraud. Mortgage brokers must practice due diligence and make sure to keep a thorough record of each interaction plus avail of private investigation services for background checks and possible surveillance.