A large majority of Canadians believe mortgage fraud is fuelling higher housing costs and tilting the market against honest buyers, according to a new national survey.
The online poll of 2,000 Canadians, conducted by Pollara Strategic Insights for Mortgage Professionals Canada and the Mortgage and Title Insurance Industry Association of Canada, found that 78 per cent of respondents agree mortgage fraud creates an unfair playing field. Another 64 per cent said it drives up home prices.
Growing concern about fraud
More than half of Canadians — 58 per cent — said they are concerned about mortgage fraud, a figure that rises to 65 per cent among people who plan to buy within the next five years.
Nearly two-thirds, or 65 per cent, said the Canada Revenue Agency should play a role in prevention. And 72 per cent support allowing lenders and mortgage brokers to verify income directly with the tax agency, a view consistent across political lines.
“These findings confirm what mortgage professionals see on the ground every day – Canadians want a fairer, more transparent system that protects honest homebuyers,” said Lauren van den Berg, president and CEO of Mortgage Professionals Canada. “Mortgage fraud not only undermines trust, it drives up housing costs for everyone. Income verification through the CRA is a practical solution that will strengthen trust in the housing market and help ensure everyone plays by the same rules.”
Ontario leads in concern
The survey also pointed to regional differences, with Ontario residents the most concerned. Eight in 10 Ontarians said mortgage fraud creates an unfair market for those who follow the rules.
I find it strange suggesting verifying income with the CRA as a practical solution to mortgage fraud, when in B.C. it is routinely required. Sometimes up to 3 years worth. Is this not a requirement across the board?
The survey reflects the views of the consuming public. The facts may not bear out the same conclusion.
No data separates fraud in the mortgage brokerage channel from the bank mortgage specialists.
There is also no empirical data that calculates inflated values stemming from the stem of AML/Proceeds of Crime. It has been estimated to 5% higher without any way to verify this level.
It certainly has been a factor in the GTA market. I watched a video a couple of years ago in which an expert on the mortgage field referred to a “Brampton” mortgage. Mortgage fraud was quite common there, and may still be.
On the good side, with the number of people in the household earning an income and contributing to paying for the property, there don’t seem to be all that many mortgage repossessions.