Valuable Fraud Prevention Tips for Homebuyers and Homeowners
Valuable Fraud Prevention Tips for Homebuyers and HomeownersMarch is Fraud Prevention Month. Canada Mortgage and Housing Corporation (CMHC) has consistently been a leader in the fight against mortgage fraud and offers the following tips to protect yourself against becoming a victim of mortgage fraud.
Misrepresentation of InformationMortgage fraud occurs when someone deliberately misrepresents information in order to obtain mortgage financing that would not have been granted if the truth had been known. This can include:
- Misstating one’s position or inflating one’s income or length of service at theirjob;
- Misstating employment status (ie. salaried/full time versus contract, part time, hourly or commission-based or self-employed);
- Misrepresenting the amount and/or source of the down payment;
- Purchasing a rental property and misrepresenting it as owner-occupied;
- Not disclosing existing mortgage and/or debt obligations;
- Misrepresenting property details or omitting information in order to Inflate the property value;
- Adding co-borrowers who will not be residing in the home and do not intend to take responsibility for the mortgage.
Consequences of MisrepresentationBorrowers who misrepresent information and straw buyers who allow a property to be purchased in their name are committing mortgage fraud and will be responsible for any financial shortfall in the event of default. They may also be held criminally responsible for their misrepresentation.
Reporting FraudIf 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.
Toll Free: 1-888-495-8501
Toll Free Fax: 1-888-654-9426
To find out more about mortgage fraud, visit the fraud prevention section of the Canadian Association of Accredited Mortgage Professionals (CAAMP) website at http://mortgageconsumer.org/protect-yourself-from-real-estate-fraud.
For over 65 years, Canada Mortgage and Housing Corporation (CMHC) has been Canada’s national housing agency, and a source of objective, reliable housing information.