Here’s some disturbing news. Mortgage fraud in Canada has risen 150% just over the last year. What is mortgage fraud? According to Wikipedia, it is “crime in which the intent to materially misrepresent or omit information on a mortgage loan application to obtain a loan or to obtain a larger loan than would have been obtained had the lender or borrower known the truth.” And not only is it happening in Canada, but it’s happening at an alarming rate. One that even suggests a level of organized crime being involved.
That is according to John Russo, chief legal counsel and privacy officer for Equifax Canada, one of our biggest credit reporting institutions. Mr. Russo says that with the schemes now being so complex, organized crime is the only group that could pull it off. And, he says, their schemes are pretty wild. They include things like working with individuals in jail, or from their own jail cell, in order to obtain the mortgages. They start small, with a fake name trying to build up a good credit history (illegitimately, of course) and then they take out a credit card, and then a line of credit, and then that mortgage, or mortgages.
And once they have it (or them) what do they do with them? Some buy properties to begin marijuana grow operations, while others simply use the property to launder money. Last year, Equifax found 300 of these fake identities. Today, they’ve caught over 2,500. Just to give you an idea of how bad it really is getting.
In total, Equifax found a total amount of $650 million in attempted fraudulent activity across Canada last year; that’s about $1.7 million of fraudulent activity every single day. And of that $650 million, $400 million was in mortgage fraud alone. Mr. Russo brought attention to the fact that the figure really only represents the amount of fraud Equifax has found on its own, and doesn’t take into consideration what other credit companies are doing or finding. And that’s even more alarming because he says, “There’s a lot more out there that just goes under the radar and is not seen and not caught.”
But it’s not just organized crime that’s involved. Mr. Russo also states that millions of Canadians are simply lying on their mortgage applications, wanting to live in a home bigger than they can actually afford. And he warns, “No matter how small or big the lie, it’s still mortgage fraud.”
Of course, mortgage fraud is something that happens all over the country. But with these latest figures, Mr. Russo also stated that it’s big city areas that are likely to find fraudulent activities, with the most vulnerable markets being Toronto mortgages, Ottawa mortgages, Quebec mortgages, and Alberta mortgage.
