How to spot mortgage industry fraud red flags

A lot of fraud and scams have had a presence in our city and the media lately, so it’s time to educate yourself on the warning signs to look for. There are some definite red flags to look for with mortgage professionals, REALTORS and/or brokerages. Noticing these signs doesn’t guarantee that fraud is actually taking place, but it should certainly raise some suspicions if more than a few of these are present.

• The professional’s lifestyle isn’t consistent with their position (living beyond their perceived means)
• The professional’s section of the mortgage contract has not been filled out
• The professional uses the same lawyer on every transaction
• The professional only works with certain associates
• The professional chooses only to work with one mortgage broker
• The professional buys and sells their own properties regularly
• Professional lends money for down payment to a client
• Regular advertising mentioning: low down, assumable, no down, no qualifying, quick possession, etc.
• Professionals who hold both a real estate and mortgage license
• The broker does not review transactions

“The industry takes misrepresentation very seriously and as a group we’ve all taken some very strong actions over the last few years to reduce instances of misrepresentation and fraud in the industry,” Stuart Levings, chief executive officer of Genworth MI Canada Inc., said in a Wednesday conference call with analysts. [Globe and Mail]

Do you have questions about mortgage applications or mortgage fraud? Please feel free to contact me via my website, or you can reach me on Twitter.

Tags : calgary fraud, calgary mortgage, calgary mortgage broker, calgary real estate, calgary scam, mortgage fraud, scam