![]() ![]() " Marketplace staff posed as homebuyers with hidden cameras "It's by far and away the biggest indicator of fraud or biggest risk of fraud we see in that space today. "Sixty-seven per cent of the applications that we find, or are tagged by our members as fraudulent, are actually related to that kind of misrepresentation," he said. The credit bureau flags between 15,000 and 24,000 suspicious mortgage applications each month, for lenders. Mortgage fraud is a growing problem, according to Carl Davies, head of fraud and identity at Equifax Canada. "The Real Estate Council of Ontario (RECO) needs additional tools to investigate bad behaviour, levy heavier fines and suspend or remove licences for egregious rule breakers." "Real estate agents who break the law and violate the trust of Ontario consumers should be thrown out of the business," Tim Hudak, president of the Ontario Real Estate Association, said Friday in a press release responding to Marketplace's investigation. In the past five years, RECO says it has disciplined seven real estate agents or brokers and laid charges under the Provincial Offences Act against several others. In a statement, RECO's registrar Joseph Richer wrote: "Agents should expect to be prosecuted if they engage in mortgage fraud."įor real estate agents, falsifying mortgage information or assisting in the falsifying of information can result in fines up to $50,000, prison for up to two years, or suspension or revocation of the agent's licence. The Real Estate Council of Ontario (RECO) would not talk to Marketplace on camera about the findings of the investigation. Marketplace It pays to get a 2nd home appraisal, especially if you're a Black homeowner, hidden camera investigation shows It also keeps honest people out of the market as they compete for various homes." "If people obtain mortgages fraudulently and they thought their backup plan was to sell the house if I can't afford it, that backup plan's disappearing. True North Mortgage has detected and stopped multiple fraudulent applications submitted to the company, along with counterfeit tax and employment documentation such as T4s and letters of employment that reference fake company names and phone numbers, where a real person will pick up and a real website exists.Īs home prices continue to plummet, these buyers are at greater risk, Eisner says. "As interest rates rise and house prices drop, these buyers are most likely to default on their payments and that can put further downward pressure on the housing market through panic sales," he said. This crime also has repercussions for Canadians as a whole, says Dan Eisner, CEO of True North Mortgage. ![]() Submitting a fraudulent mortgage application is also a violation of Canada's Criminal Code. New Canadians are also less likely to immediately qualify for a mortgage at one of Canada's big banks, as their employment and credit history in Canada is more likely to be limited.Įxperts in law and financial crimes say what Marketplace has uncovered is illegal under Ontario's Real Estate and Business Brokers Act and the Mortgage Brokerages, Lenders and Administrators Act. Newcomers are particularly at risk, as they may not fully understand the home-purchasing process. While some consumers actively seek out and participate in this fraud, Marketplace has learned that some real estate agents are also taking advantage of unwitting buyers. On the sale of a $640,479 home, the average sale price in Canada, a real estate agent would typically make $16,000 to $32,000 in commission, while the mortgage agent could earn upward of $2,550 in commission from a lender. Real estate agents say the teams charge one per cent of the mortgage amount for the fabricated mortgage application. This is in addition to other commissions that can be earned once the sale is finalized. ![]() Have a question or comment about mortgage fraud? Email: a lucrative business.They are recorded on hidden camera offering to connect buyers with fabricated documents showing fake employment, salaries and tax filings, so buyers can obtain loans they would not otherwise qualify for. An undercover investigation by CBC Marketplace has exposed some networks of real estate agents, mortgage brokers and bank employees facilitating mortgage fraud for a fee. As interest rates rise, qualifying for a mortgage is getting harder for buyers, but that isn't stopping some real estate agents from making a sale. ![]()
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