What is mortgage fraud and why is everyone afraid of it?
A credit rating agency is ringing the alarm that Canadians should be worried about a rise in mortgage fraud.
“Recent years have witnessed accumulating reports of fraudulent information corrupting the inputs used in the underwriting process for Canadian residential mortgage originators,” reads a recent report from Standard & Poor’s. In the report, S&P cites rising levels of household debt as a major concern when it comes to the possibility of mortgage fraud in Canada. [Buzz Buzz News]
So, what is mortgage fraud and what can be done about it?
Mortgage fraud is misrepresentation of information to help you obtain a mortgage, including:
- Inflating your income or misrepresenting your job
- Misrepresenting your income (stating you’re salaried when you are contract, etc.)
- Not disclosing current debts and/or mortgage loans
- Inflating property value
How can you protect yourself against mortgage fraud?
- Don’t sign a document that has any blanks in it or a document that you didn’t take the time to read thoroughly (and understand). If you need help understanding it, seek independent legal advice for that.
- No matter how tempting a few thousand dollars might be, never allow anyone to use your name and credit information in exchange for money. It sounds like common sense, but it actually happens a lot more often than you may think.
- Never use false information in your mortgage application. A sketchy mortgage lender may ask you to falsify your employment information to get a mortgage you wouldn’t otherwise qualify for, or that you really can’t afford.
- Never deliberately misrepresent ANY information during the loan process
- Always know who you are dealing with: get recommendations or referrals
- Never sign anything without reading it through carefully
- Seek legal advice
- Never trust anyone offering ‘easy money’ or ‘easy investment’ opportunities. What sounds too good to be true, usually is.
If you have specific questions about mortgages or mortgage fraud, please feel free to contact me.
