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Cracking Down on Mortgage Fraud Involving Real Estate Agents and Financial Professionals

I wanted to share with you a story that caught my attention. As you may know, rising interest rates make it harder for potential homeowners to get approved for a mortgage. However, some real estate agents are still able to complete housing transactions. Through an undercover investigation, CBC Marketplace found that a group of real estate agents, mortgage brokers, and bank employees were helping to make mortgage fraud happen.

Mortgage Fraud is Illegal

Newcomers and first time homebuyers are particularly at risk, as they may not completely comprehend the home-buying process. But, luckily they are caught on hidden camera offering to provide buyers with forged employment, salary, and tax documents in order to get loans for which they would not otherwise qualify.

Let’s examine RECO’s reaction to the mortgage fraud crisis and the Registrar’s statement.

“We are investigating these allegations and assessing next steps. Be assured that RECO will prosecute any registrants who are proven to have engaged in mortgage fraud.

We are aware of recent allegations that some real estate agents and brokerages in Ontario are facilitating mortgage fraud. To whatever extent this is happening, it must stop. 

We are investigating these allegations and assessing next steps. Be assured that RECO will prosecute any registrants who are proven to have engaged in mortgage fraud.

Such conduct is a breach of the Real Estate and Business Brokers Act, 2002 (REBBA) and also breaches other laws, including the Criminal Code of Canada.

Prosecution for falsifying information or assisting in the falsifying of information can result in fines up to $50,000, prison for up to two years, or suspension or revocation of the agent’s RECO registration. More severe penalties could be levied if individuals are convicted under the Criminal Code.

It is also illegal for a real estate agent to ask a consumer for money to get their loan approved.

RECO takes this matter seriously and encourages anyone with evidence of mortgage fraud occurring to report it to authorities, such as the Financial Services Regulatory Authority (FSRA), which regulates mortgage agents, RECO, or the local police service. You can file a complaint with RECO here.

In addition to being illegal, such activity undermines consumer protection and confidence in the real estate sector. We expect all real estate professionals to support us in driving home the message that there is zero tolerance for this behaviour in the real estate industry.

Mortgage fraud is illegal and we must all work together to prevent it.

Joseph Richer
Registrar, RECO
 

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If you have been considering Buying, Selling, or Renting your home or have avoided the notion due to a negative experience, let Arsh Syed, a Real Estate Agent in Toronto, manage the transaction.

His experience and understanding have been indispensable. He desires Toronto’s housing crisis to improve. He wants to establish relationships and spread the word about his exceptional service, increasing the likelihood that renters and property owners would place their faith in him.

Arsh wants property owners to know that by hiring him, they are drastically reducing risks, saving time and saving money.

For further information about his services, please visit 

https://www.real-estate-in-toronto.com or contact (416) 844-2217

For more interesting blogs, please visit: 

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