Fraud is such a dirty word in today’s business world, it has the feel of under world behaviour that all societies fear. Sometimes fraud happens because people don’t know that they are committing it just by the simple act of omission. In almost 10 yrs of mortgage brokering and hundreds of millions of dollars of transactions by agents and myself in our business, I can honestly say we have caught probably no more than 5 blatant acts of fraud. Hats off to my team for recognizing them and reporting them as they should have done.
So, what is mortgage fraud?
Well it comes in many forms. It can be as simple as fraud for shelter as in a client wants the house so bad they would do anything to make the deal work to organized crime stealing your property and ID via a false application. The first one can spotted quite easily as in the say one thing about their income and then letters of employment and verbal confirmation say another that can be seen as fraud.
We had a file that the person applying for it was attempting to refinance a property in Calgary that was clear title. They had applied on line, as is often the case, used the owners name and had a pretty convincing story about working out of the country a lot, which the owner did, so they had really done their home work and research. The only thing that tripped them up was that the age they gave and the original registration on the title made no sense. They would have had to have been teenagers when they bought the home. An IP address search went all the way back to a computer in Washington DC.
We often see new construction files coming through where the builder is offering incentives to purchase and insurers and lenders alike will reduce the amount of mortgage by that amount if it is in the offer. If it is not disclosed and the lawyer refunds monies to the client that is considered fraud as well. Lately even furniture left behind is being requested to be removed from the contract.
Fraud is all around us and in some cases it is simple omission but more and more fraud is being committed for the sake of making the sale. Personally we have let agents go even if we suspect that they may be involved, more proudly our team at the first utterance of potential fraud will fire the client, report it and document it in our files. No one deal is worth any of our licenses or our integrity.