With the rise of real estate prices with the Greater Toronto Area and income and employment matching the increase, mortgage fraud has the appearance of an option to obtaining a mortgage. On the surface it may appear as if there is no long term harm done, creative financing is never a solution to your home property ownership aspirations. Over my career as a mortgage agent, I have seen the negative affects of mortgage fraud through professionals who have damaged their reputations and lost their licenses through mortgage fraud. Often times with limited knowledge to their clients of what they were actually doing. With the intent of ensuring my readers are properly informed with what the mortgage application process looks like, I wanted to take the time to provide details of what to avoid when applying for a mortgage. The Canada Mortgage and Housing Corporation defines mortgage fraud as when someone deliberately misrepresents information to obtain mortgage financing that would not have been granted if the truth had been known. Some of the methods of which mortgage professionals and clients do this are listed below:
  1. Non-disclosure of mortgages or existing debts: This presents the applicants with less debts usually to appear as if you can afford a mortgage that they actually can't. Obtaining a mortgage only leaves clients with payments that they will have challenges meeting and often leads to selling prematurely or foreclosure.
  2. Lying about your employment or inflating your income: Misleading the lender of your actual income often includes providing fraudulent job letters, pay stubs, bank statements and even Notice of Assessments.
  3. Misrepresenting the source of your down payment: Using credit cards, vendor take backs that are not disclosed, using funds from countries that are sanctioned, or even second mortgages.
  4. Misleading Appraisal Reports: Creating appraisal reports with inflated values or even inaccurate depictions of the property itself.
There are many other scenarios which also constitute as mortgage fraud. Always keep in mind that any information that is not accurate is technically considered mortgage fraud. A very important factor in deciding who you will use for your mortgage services is completely aware what constitutes as mortgage fraud. There many situations where professionals create documents on the client's behalf without them knowing. Be sure to look into your potential professional and be sure that they are integral, qualified, and experienced before providing your personal information. Shopping around is the right of the client, but you will have no control over what another person will do with your information. Be sure that you are obtaining references, and referrals from individuals you can trust. Your home is an important asset to you and ensuring that you are comfortable, safe, and protected should be the number one priority of your mortgage professional. Before providing too much information, have a few conversations with a few professionals before deciding who is best suited to assist you with your mortgage. As always, you may email me at shaunese@shauneselawrence.com any questions you may have or refer to other posts to obtain further information to secure your comfort. If you've found this information to be helpful, share it with someone who you believe would also benefit.