House Standing Committee on Finance (May 31, 2024)
ISSUE: Real-estate fraud

Mortgage fraud

Mortgage fraud, also called application fraud, happens when you provide false information on a mortgage application. Someone else may try to falsify your documents or encourage you to do so. When that happens, you may be held responsible for committing mortgage fraud. It may also impact your ability to obtain credit or a mortgage in the future.
FCAC is aware of reports of falsified proofs of income in mortgage applications. Oversight of mortgage underwriting falls under OSFI’s mandate and FCAC share information with OSFI to support this work, including information received through whistle-blowing.
As part of its mandate, FCAC oversees the compliance of regulated entities with federal regulations, such as the Mortgage Guideline, and other consumer protections on disclosure, express consent and complaint-handling.

Title fraud is typically related to identity theft. A stolen identity is used to steal the title to a home to sell it or apply for a new mortgage against it.
Land registration processes and oversight are under the authority of the province or territory in which the land is situated. Provincial consumer affairs organizations may be able to provide more information.

Foreclosure fraud may occur when a consumer is struggling to make their mortgage payments. Fraudsters may convince consumers to transfer their property title in exchange for a loan. The fraudster keeps the loan payments and now possess the title to the home, which they may resell or refinance.
In addition, complaints reported to FCAC are reviewed to identify whether a market conduct obligation may have been breached.
If FCAC determines that the information in the complaint indicates a potential breach of a market conduct obligation, it may take further action to address a bank’s non-compliance with its market conduct obligations.