Anytime large sums of money converge, there’s a real risk of fraud. Sadly, the real estate industry is no stranger to forms of shady financial schemes.
Sometimes, extremely wealthy criminals deliberately overpay for luxury property and art to launder money since it’s more discreet than cash and grows in value still more. Who can say whether a luxury penthouse condo overlooking Central Park should cost $10 million or $50 million?
Mortgage fraud is a very different type of scam because it may involve lesser sums of money and housing that isn’t for the ultra-rich. Let’s look at how Burke Financial works when using a home equity loan that keeps you safe from any shady business.
What is Mortgage Fraud?
In a basic sense, mortgage fraud occurs when somebody deliberately includes misrepresentative information to secure a mortgage they wouldn’t otherwise get had they been honest. Any time you borrow money, the lender has a right to know certain financial details that give them the confidence to lend a certain amount at a rate they decide.
Lying about this data is not just highly unethical; it’s a crime. There’s a reason that lenders investigate who they’re lending to before agreeing to the terms — it’s only fair that both sides are transparent and upfront about their identity, income, and any level of risk.
There are many different types of mortgage fraud, as the following examples can attest:
- Misstating your employment position, income level, or the amount of time you’ve worked there.
- Declaring yourself a full-time employee if you only work part-time.
- Misrepresenting the amount or source of your down payment.
- Claiming that a property you rent is occupied by the owner.
- Concealing other debts or mortgages owed.
- Omitting information to artificially inflate the property’s value.
- Adding purchasers’ names to the mortgage who don’t intend on making any mortgage payments.
- Acting improperly as a “straw buyer” or middleman using your good credit to secure a mortgage for somebody else.
The good news is that you don’t need to be familiar with all the different types of fraud if you’re determined not to commit any! Simply be honest and upfront when applying for second mortgages in Ontario or any other paperwork, and you won’t have any issues.
How Can You Avoid Fraud?
The surest way to steer clear of any fraudulent mortgage-related activity is to always be honest and upfront when applying for a mortgage. Sometimes people get creative when gently inflating their resume to get their first job — the stakes here are very different, and any type of misleading statements won’t do.
Gently overstating your work experience on a resume may be socially acceptable and even expected, to some degree, so long as you’re not outrightly lying. However, mortgage fraud is altogether different. It’s not only frowned upon: it’s also highly illegal.
It helps to know a few helpful traps to avoid. Never sign your name on another person’s mortgage unless you plan to make a payment. This may sound obvious, but you’ll be on the hook for any payments you officially commit to on paper!
Along the same lines, never sign any documents unless you’re positive you understand them all. Be sure they’re translated, if necessary. If you pay a down deposit on a home, don’t pay the seller directly. Instead, ensure it’s held “in trust” or in escrow by the seller’s realty company or their lawyer or notary.
You should be aware of the property’s sales history before the purchase is complete, so check the land title’s office or even get it appraised and inspected. With a lawyer’s help, see that nobody else aside from the seller has an interest in the property and that there are no outstanding tax arrears or liens.
Buying property is nothing like purchasing something off Kijiji. You have to know who you’re dealing with, which means using licensed and accredited mortgage and real estate professionals! The experts at Burke Financial will keep you in the clear, so you can focus on your job instead of worrying about mortgage fraud.
We can give you independent advice and alternative methods of protection. Relying on experienced professionals who can quickly identify the red flags of mortgage fraud is an excellent way to steer clear of this trouble.
Professionals Can Be in on It
Sometimes, people commit mortgage fraud by accidental misrepresentation they don’t quite realize are criminal. Other times, it’s an elaborate and premeditated crime committed by real estate agents and shady brokers.
A CBC investigation uncovered a ring of such real estate criminals offering to connect buyers with fabricated documents showing fake employment, salaries, and tax filings, so buyers could obtain better loans than they’d get otherwise.
Such predatory real estate professionals work with buyers intent on fraud, but they also take advantage of novice buyers and people new to the country. Needless to say, Burke Financial denounces this type of fraud unreservedly!
We work closely with each customer to find the right mortgage refinancing tips for them, which means understanding their financial goals and lifestyle. Our brokers have deep and old ties with a variety of lenders, so they can connect you with the backing you need, even if the bank denies you a loan.
Burke Financial is a trusted broker with an accredited 5-star rating from the Better Business Bureau. We have already helped thousands of Canadians with their mortgages, savings them thousands of dollars each year.
For excellent, personalized customer service from industry-leading experts, choose Burke Financial today. You won’t need to bother with online research about the optimal mortgage information, never mind worrying about legal compliance.
Buying a home or refinancing your current one doesn’t have to be a stressful experience with the right professional help by your side. Navigating the housing market can be an intimidating prospect because the stakes are high, and your decision’s consequences will be felt for years. When you need a private mortgage loan, let Burke Financial guide you, so you save money, enjoy a hurdle-free process, and effortlessly steer clear of any legal wrongdoing.
