Now here’s a strange twist…. Read this report about a claim filed in BC that states BMO and RBC were “willfully blind” when approving mortgages for a marijuana grow-op…. The report says that a ‘cook’ and a ‘cashier’ owned this particular house at different times… Makes you wonder how a ‘cook’ or a ‘cashier’ could afford a house in Vancouver where average house prices are close to $1,000,000.
There’s an old saying, “when times get tough, the garbage will hit the fan”…. maybe there is another word used besides garbage, but you get the point.
During the last big recession in 1989-90, there were numerous reports about mortgage fraud. It’s not that fraud only occurred during this time, it’s that Banks finally lost money when property values stopped increasing and started declining. Fraud occurs all the time but it’s not something that the Banks want to report on for fear it will diminish their credibility in the eyes of investors and the public.
I have a suggestion. Maybe the Banks should start to look within and see how they compensate their staff….Most banks now tie in their employee’s compensation directly to sales. Credit cards, loans, lines of credit, bank accounts and mortgages. Every time the Banker sells one of these products they are compensated according to the sale….
What’s even worse are the 100% commissioned bank employees that sell mortgages… the so-called ‘Mortgage Specialists’… These sales people are paid based on the mortgage amount, the product, term and the interest rate. It sure would be nice if ‘Mortgage Specialists’ were regulated like Mortgage Brokers… held accountable for all mortgage transactions under the Provincial government regulations….These regulations carry severe penalties for fraud….Just a thought?
Watch for more stories like this to unfold in the coming months… hopefully, this won’t be an excuse for the Banks to charge more fees or raise the cost of borrowing…
As an industry insider, Steve will share info that the BANKS don't want you to know. Steve has appeared on TV's Global Morning News, CBC's "Our Toronto" and The Real Life TV show. He's also been quoted in several newspapers such as the Globe and Mail, The Toronto Star, The Vancouver Sun, The Star Phoenix, etc.