The Standard and Poor credit rating agency still has Canada in its sights for mortgage fraud. It cites evidence of riskier lending continuing at smaller Canadian banks according to Financial Post. This “could compound existing risks from the country’s hot housing market,” S&P fears. The nation is on par with the United States, but lagging behind the United Kingdom and Australia.
The Two Types of Mortgage Fraud Continuing
Normally law-abiding citizens may be tempted to commit opportunistic fraud by over-stating their income in order to qualify for larger mortgages and more expensive homes. The possibility of this happening increases when economic recovery is slow, while people are impatient to take the next step up the real estate ladder. They may also want to remortgage to escape a pending cash crisis.
Meanwhile, criminal enterprises are always on the lookout to make money by committing fraud for profit. This may involve real estate industry professionals. These dubious companies may “deliberately misstate, misrepresent or omit relevant details about their clients’ employment and income, debt and credit, or property value and condition with the goal of maximizing profits on a loan transaction” says Investopedia.
The perpetrator may be a builder, real estate sales agent, loan officer, mortgage broker, credit / debt counsellor, real estate appraiser, property inspector, insurance agent, or attorney. Needless to say they will be far away when their innocent victim is facing foreclosure, because they have no cushion of comfort when they get into financial trouble.
Canada Mortgage and Housing Corp Ropes in Tax Authority
Canada’s Mortgage and Housing Corporation acknowledges these criminals are harder to stop when they act in collusion. It wants the Canadian tax authority to “take a more direct and formal role in verifying incomes stated on mortgage applications” according to Which Mortgage.
This is not currently the case, although it is common practice in the US and the UK. In fact, the Canadian tax authority does not do so even when the tax payer provides consent. The Canada Revenue Agency may however be relenting.
“We are currently exploring different avenues in which to improve how we deliver taxpayer specific information in a secure manner. Including the feasibility of securely sharing tax information with financial institutions upon client consent,” the tax agency said in a statement.
Speak to Stonegate Equity the People You Trust
We have the distinction of being boldly different, in a real estate industry that sometimes seems hell-bent on its own narrow interests. Please speak to us soon for an honest appraisal of how much you really can afford. And a property in your price range that meets expectations for what you long to own.