Mortgage Fraud has been on the rise in Canada and last year, Canada's credit reporting agency, Equifax estimated Mortgage Fraud had increased to over $400 million in Canada: http://www.vancouversun.com/business/Mortgage+fraud+hits+opening+level+Canada+report+says/6183708/story.html
So what exactly is Mortgage Fraud?
There are two prominent kinds of mortgage fraud today: One involves scams that attempt to illegally acquire property—‘fraud for property’—and one wherein schemes are designed to squeeze money out of transactions involved when a property is exchanged between buyers — ‘fraud for profit’.
This can involve purchasing properties without intending to reside in the location; using properties for grow-ups, money laundering and other criminal activities; flipping and inflating property values by falsifying documents, such as appraisal reports and more.
To protect yourself against Mortgage Fraud, Invest Wisely:
- Make sure you are using a licensed mortgage broker or associate who is registered under the Real Estate Act in Alberta. Licensed mortgage brokers and associates are required to conform to a code of conduct enforced by the Real Estate Council of Alberta(RECA). Contact RECA by visiting their website at www.reca.ca or by calling 403.228.2954 to ensure your broker or associate is licensed.
- Before you buy, have a REALTOR® show you the listing history on the property. Check the number of sales, price ranges, and community prices.
- Get your own REALTOR® or independent representation foryour purchase (if the seller objects, something is wrong).
- Make sure your REALTOR® is a licensed associate with RECA.
- Ask for a copy of the land title search.
- In the offer to purchase, include the option to have the propertyappraised by a designated or accredited member of the Appraisal Institute of Canada. Who is also authorized by RECA.
- Make sure your deposit is being held in a trust account.
