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March: Fraud Prevention Month

March: Fraud Prevention Month

Date Posted: March 1, 2018

No consumer ever thinks they will fall victim to identify theft or mortgage fraud. The best way to ensure this doesn’t happen to you is to be aware of the circumstances to which it may occur.

Since 2013, Equifax reported a 52% increase in suspected fraudulent mortgage applications.  With new rules and guidelines now in place, some individuals may be more fraught to get their feet into the housing market and it has never been more important to understand what mortgage fraud and identity theft are and how to protect yourself.

Mortgage fraud occurs when someone deliberately misrepresents information to obtain mortgage financing that would not have been granted if the truth had been known. This can include, to name a few:

  • Misstating your position or inflating your income or length of service at your job.
  • Misrepresenting the amount and/or source of your down payment.
  • Purchasing a rental property and misrepresenting it as owner-occupied.
  • Not disclosing existing mortgage and/or debt obligations.

 

Consequences Of Misrepresentation

Borrowers who misrepresent information and straw buyers who allow a property to be purchased in their name are committing mortgage fraud and will be liable for any financial shortfall in the event of default. They may also be held criminally responsible for their misrepresentation.

 

What Can You Do To Protect Yourself?

To protect yourself and your family from becoming victims of, or accomplices to mortgage fraud, be an informed consumer. This means:

  • Never deliberately misrepresent information when applying for a mortgage.
  • Always know who you are doing business with. Use licensed or accredited mortgage and real estate professionals.
  • Never sign legal documents without reading them thoroughly and being sure you understand them.  If uncertain, obtain a second legal opinion or, if necessary, the services of a translator.
  • Your lawyer will advise you if anyone other than the seller has a financial interest in the home or if there are any outstanding liens or tax arrears.
  • Be wary of anyone who approaches you with an offer to make "easy money" in real estate. Remember: if a deal sounds too good to be true, it probably is.

There are also simple steps you can take to protect yourself from another common form of fraud: identity theft.

These include but are not limited to:

  • Never give out your personal information until you know who you are dealing with and how your information will be used. This includes requests for information in person, by mail, or over the phone or Internet.
  • Never reply to e-mails or phone calls that ask for your banking information, credit card details, passwords or other personal or sensitive information, particularly if you did not initiate the exchange.
  • Review your mail, bank statements and other financial statements on a regular basis to look for any inconsistencies. If you do not receive a bill on time, follow up with your creditors or service providers. You may also wish to contact your local Postal Outlet to ensure your mail has not been held or re-routed.

 

Reporting Fraud

If you suspect that you or someone you know has been the victim of mortgage fraud, please contact your local police department or The Canadian Anti-Fraud Centre.

Visit on our Mortgage Info Centre for more information or visit The Canadian Anti-Fraud Centre goverment website. 

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