Here is a good article from McLean’s Magazine that talks about more Mortgage Fraud taking place in Mississauga and other parts of Canada.
But before you read any further, just make sure you understand something… during an economic downturn, we will hear and see more crime related reports…. I’m not sure fraud has increased more or if the fraud can no longer hide behind rising house prices and stable employment…
One of the big mysteries is that we don’t know how much mortgage fraud really takes place in Canada. That’s because no statistics are available…or at least are not made public.
The McLean’s article said the Canadian Bankers Association says they have no stats on mortgage fraud… and CMHC said that ‘it wasn’t able to provide that data prior to the article being published’….. Come on… no one has these statistics??? Then how do we know fraud is a problem?? Clearly, the Bank’s obligation is to it’s shareholders… and reporting any type of fraud could affect the value of the shares….discretion is always exercised when talking about taboo subjects like fraud. Some have suggested it’s an acceptable cost of the mortgage business… after all, there are over $940 billion in outstanding mortgages in Canada.
Earlier this year, we saw a high profile case with BMO filing charges of mortgage fraud naming hundreds of people… the fraud was for $140 million and could cost the bank $30 million in losses.
Then in June, a report came out from the BC govt that slammed RBC and BMO for loose lending practices…. what made this report somewhat funny is that during this same week, RBC received an award for Creditor of the Year… one of the reasons for winning the aware was that RBC was ‘thinking outside the box’.…. yeah, I guess they were..!
I don’t know if there is any correlation but the Big Six Banks (TD, BMO, CIBC, Scotia, RBC, National Bank) have been on a massive hiring blitz… hiring record number of so-called Mobile Mortgage ‘Specialists’ …. These banks have doubled and tripled their commissioned sales force in the past few years…. That’s right, COMMISSIONED sales force… Makes you wonder…..
By the way, Bank employed ‘Mortgage Specialists’ are not registered with the Ministry of Finance like Mortgage Brokers are…no license to lose…