Pattie Lovett-Reid: Why mortgage fraud may be on the rise in Canada
Are you willing to stretch the financial facts just a little to qualify for a mortgage you might not otherwise qualify for? If the answer is yes, you aren’t alone.
New data from Equifax suggests high-risk and suspected fraudulent activity is on the rise with a 52 per cent increase in suspected fraudulent mortgage applications since 2013. Falsified account statement and falsified documents were the most prominent application tags, as reported by investigators. Conflicting information was another big one with 67 per cent applications being flagged from Ontario and 12 per cent from coming out of B.C.
There are serious consequences if you stretch the truth such as a breach of contract. Even if they are little white lies, it is important to note it is against the law if you falsify data on a financial documents. Add to that, being stretched financially beyond your capabilities puts not only you but the financial institution in a potentially tough situation.
A few survey highlights:
- 13% of Canadians felt it was okay to tell a “little white lie” when applying for a mortgage to get the home they want
- 16% believe mortgage fraud is a victimless crime
- 8% admit to misrepresenting the facts on a credit or loan application.
Interesting to note in another report out by RateHub.ca the "bank of mom and dad” could be in for a banner year in 2017. Rising home prices have made entering the housing market for first time homebuyers an ongoing challenge and in the hotter markets of Vancouver and Toronto not surprising 42 per cent in B.C. reported receiving help from relatives for their first home while 35 per cent did as well in Ontario.
Seems to me this is a better course of action then risking an offense and mom and dad are unlikely to foreclose on you or press charges if you miss a payment.