Mortgage Fraud: How to Protect Yourself

Mortgage fraud doesn't just hurt lenders—it can devastate homebuyers and cost you your home. Understanding how fraud works helps you protect yourself during the buying process.

Types of Mortgage Fraud

Fraud FOR Housing

Misrepresenting information to qualify:

• Inflating income on applications
• Hiding debts
• Fake employment letters
• False down payment sources

Fraud FOR Profit

Schemes to steal money:

• Title fraud (stealing your home's title)
• Straw buyer schemes
• Inflated appraisals
• Fake seller schemes

How to Protect Yourself

1. Guard Your Personal Information

• Don't share SIN unnecessarily
• Shred financial documents
• Monitor your credit report regularly
• Use secure communications

2. Verify Everyone Involved

• Research real estate agents
• Verify lawyer credentials
• Check lender legitimacy
• Be wary of unsolicited offers

3. Review Everything

• Read all documents before signing
• Question anything you don't understand
• Ensure stated values match reality
• Keep copies of everything

Report Suspicious Activity

If something doesn't feel right, contact us or report to the appropriate authorities.

Red Flags to Watch For

During purchase:

• Pressure to sign quickly
• Unusual financing arrangements
• Request to sign blank documents
• Being asked to lie on applications

After purchase:

• Bills or statements you don't recognize
• Unknown mortgages on your title
• Unexpected legal notices
• Credit report showing unknown accounts

Title Fraud: The Scariest Type

Title fraud occurs when someone steals your home's title:

1. Fraudster obtains your personal information
2. Forges documents to transfer title
3. Mortgages "your" property
4. Disappears with the money

Protection:

• Title insurance (protects against this)
• Regular title searches
• Secure personal information
• Monitor your property title

If You're a Victim

Steps to take:

1. Contact police immediately
2. Notify your lender
3. Contact your lawyer
4. File with the Canadian Anti-Fraud Centre
5. Alert credit bureaus
6. Claim on title insurance (if you have it)

FAQ

Q: Is lying on a mortgage application really fraud?
A: Yes. Misrepresenting income, employment, or debt on an application is criminal fraud that can result in prosecution.

Q: Does title insurance protect me?
A: Yes. Title insurance protects against title fraud, forged documents, and other title defects. It's usually required by lenders.

Q: How common is mortgage fraud?
A: More common than you'd think. Lenders and regulators estimate billions in fraudulent mortgage applications annually.

Q: Can I accidentally commit mortgage fraud?
A: Technically yes—if you provide inaccurate information, even unintentionally. Always verify everything on your application is accurate.

What's Next

Work with reputable professionals who verify everything properly. Connect with our team for honest, transparent mortgage guidance.