Mortgage fraud is a criminal offence and should be taken very seriously.
Mortgage fraud occurs when a person purposefully misrepresents his/herself and information in order to get a mortgage under false pretenses. Mortgage fraud can come in many forms.
- Forging documents
- Inflating your income, length of time spent with your employer, commission amounts, position, etc.
- Lying about debt and other mortgage obligations
- Not disclosing how you received your downpayment
- Purchasing a rental property and claiming it to be owner-occupied without living in it
- Misrepresentation property value, details or leaving important information out
- Adding co-borrowers to the mortgage who will not be living in or using the home
- Tampering with the property’s actual value through sales and re-sales
This fraud is not limited to home purchasing, it is also present in renewing and renegotiating a mortgage. Furthermore, people with good credit can be duped into using their clout to get a mortgage for someone with bad credit. This is not to say that you can’t have a cosigner on your mortgage, but be careful of who that person is. Many con artists prey on good credit individuals who have never purchased a home before and convince them to put their name on the mortgage application on their behalf.
If you all for this scam, you are called a “Straw buyer,” and it is unfortunately, very common. If someone promises you cash in exchange for a mortgage in your name, do not take the bait. You will be stuck with the mortgage payments. Plus, accepting cash for putting a mortgage in your name is illegal.
To protect yourself from mortgage fraud do not give out your personal information to anyone. You should also:
- Never sign legal documents without carefully reading them first
- Always work with an accredited mortgage broker to ensure the deal you are getting is legit
- Never misrepresent yourself and any of the information you put on a mortgage application
- Report any misdoings you notice, for instance, if someone offers you cash for a mortgage
- Only trust credit reports from the country’s two regulated credit-reporting agencies; Equifax Canada and TransUnion Canada
Unfortunately, there are bad people out there who want to take advantage of good people to make a quick buck. If you think you’ve been the victim of mortgage fraud, contact the authorities immediately. Don’t wait until your property is foreclosed and your credit has been shot.