Member Login 

AMBA

  • Buying a Home
    • Why Work With a Mortgage Broker?
    • Steps to Mortgage Approval
    • Understanding Mortgages >
      • Mortgage Types & Rates
      • Being a Responsible Borrower
      • Your Mortgage Contract
      • Being Aware of Risks
    • Mortgage Insurance
    • Real Estate Fraud
    • Find a Mortgage Broker
  • For Mortgage Brokers
    • Our Role in Advocacy
    • Value of membership >
      • Affinity Program
    • RECA Guides & Industry Tools
    • Compliance Toolkit
    • Become a Member
    • Member Portal Login
  • Join Our Industry
    • Why Become a Mortgage Broker
    • Apply for Mortgage Courses
    • How to get licensed in Alberta
    • Join a Member Company
    • Industry Job Board
    • Newly Licenced >
      • Finding a Brokerage
    • 2025 Sponsorship Packages
  • Events & News
    • 50th Anniversary
    • 2025 Alberta Mortgage Conference
    • Awards
    • Event Calendar
    • Industry News
  • About Us
    • Our Mission & Strategic Plan
    • Board of Directors
    • Committees >
      • Join a Committee
      • Audit, Finance & Risk Committee
      • DEI Advisory Committee
      • Education & Professional Development Committee
      • Governance Committee
      • Political Action Committee
      • Professional Standards Committee
      • Women of AMBA Committee
      • 2025 Awards Adjudication Working Group
      • 50th Anniversary Advisory Committee
    • Code of Conduct
    • Our Team
    • Contact
  • Blogs & Articles
  • Buying a Home
    • Why Work With a Mortgage Broker?
    • Steps to Mortgage Approval
    • Understanding Mortgages >
      • Mortgage Types & Rates
      • Being a Responsible Borrower
      • Your Mortgage Contract
      • Being Aware of Risks
    • Mortgage Insurance
    • Real Estate Fraud
    • Find a Mortgage Broker
  • For Mortgage Brokers
    • Our Role in Advocacy
    • Value of membership >
      • Affinity Program
    • RECA Guides & Industry Tools
    • Compliance Toolkit
    • Become a Member
    • Member Portal Login
  • Join Our Industry
    • Why Become a Mortgage Broker
    • Apply for Mortgage Courses
    • How to get licensed in Alberta
    • Join a Member Company
    • Industry Job Board
    • Newly Licenced >
      • Finding a Brokerage
    • 2025 Sponsorship Packages
  • Events & News
    • 50th Anniversary
    • 2025 Alberta Mortgage Conference
    • Awards
    • Event Calendar
    • Industry News
  • About Us
    • Our Mission & Strategic Plan
    • Board of Directors
    • Committees >
      • Join a Committee
      • Audit, Finance & Risk Committee
      • DEI Advisory Committee
      • Education & Professional Development Committee
      • Governance Committee
      • Political Action Committee
      • Professional Standards Committee
      • Women of AMBA Committee
      • 2025 Awards Adjudication Working Group
      • 50th Anniversary Advisory Committee
    • Code of Conduct
    • Our Team
    • Contact
  • Blogs & Articles

Blogs & Articles

Broker Beware!

3/28/2023

2 Comments

 
Picture
​March is Fraud Prevention Month, and in recognition, we are reminding those that work in the mortgage industry about the crucial role they play in recognizing and preventing mortgage fraud.
 
Earlier this year, regulatory experts Ryan DeLuca and Adam Feldman joined AMBA members for a virtual session on fraud and the mortgage industry, in which they emphasized the duty mortgage brokers have to their clients, as well as the public at large.
 
“Mortgage brokers are not merely facilitators, moving documents from one party, the borrower, to another party, the lender,” says DeLuca. “Mortgage brokers are required to do their due diligence to protect their clients and the public from harm.”
 
By keeping red flags in mind while working with clients, mortgage brokers can help flag potentially fraudulent activity. The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) and RECA are both valuable resources for new suspicious activity to watch out for.
 
However, DeLuca recommends when brokers come across a red flag to look at the circumstances as a whole to determine if the red flag is an indication of potential fraud.
 
“You need to use your ‘Spidey’ senses and evaluate the red flag in relation to the rest of the transaction. Does something that is happening make the hairs on the back of your neck or your arms stand up? Does it feel wrong?” says Deluca.

​According to RECA, there are five types of mortgage fraud that mortgage brokers should be aware of:
 
1. Fraud for Shelter
 
The most common type of mortgage fraud, borrowers falsify information on their application to obtain approval. A February 2023 survey for BNN and RATESDOTCA revealed that 18% of respondents believe it’s okay to distort employment information when applying for a mortgage.
 
2. Fraud for Profit
 
This fraud typically involves several parties, including a real buyer and a fake buyer (known as the “straw” buyer). Oftentimes this scheme will involve falsely raising the property value in order to secure a larger mortgage, with the real buyer stealing the money and leaving the “straw” buyer with a large debt. 
 
3. Title Fraud
 
This type of fraud occurs when a person poses as the legitimate owner of a property and sells the title without the actual owner’s knowledge. DeLuca notes that title fraud is one of the less common schemes in Alberta due to the province’s title and regulatory system. 
 
4. Foreclosure Fraud
 
While this fraud involves a variety of different schemes, the target is a homeowner on the brink of or in foreclosure. The homeowner is promised financial assistance, typically in exchange for transferring the title to the fraudster, wherein they will ask the homeowner to pay “rent” and take the money without making payments on the home, or even sell the home to someone else and take the proceeds, leaving the target with their debt and without a home.
 
5. Seller Financing Fraud
 
A home can be legitimately purchased through seller financing. However, fraud can occur through deceptive or scam agreements. Both the homeowner and the potential purchaser can be victims – the fraud could include the purchaser paying monthly installments to the homeowner without the lending institution’s knowledge of the transaction, or, similar to title fraud, a seller financing agreement could occur without the actual homeowners knowledge. 

​When it comes to recognizing mortgage fraud, DeLuca encourages brokers to trust their instincts. “You are experts in your field, as mortgage brokers, so you can tell when something feels off, even when the conduct in and of itself may not be indicative of a crime – sometimes it just doesn’t feel right.”

About Fraud Prevention Month
 
Fraud Prevention Month occurs in March every year. It is a month-long campaign with the aim of assisting consumers and businesses in identifying and reporting fraud. According to the Canadian Anti-Fraud Centre, Canadians lost $531 million to fraud in 2022. Visit their website for information on common scams and other resources. 
2 Comments
Variable Home Loan Rates link
5/3/2023 08:13:17 pm

Thanks for making a blog about these mortgage fraud. I feel bad for those who fall victim to these schemes. I really love how well written this article is really helpful.

Reply
Mortgage Broker Australia link
1/22/2024 11:27:15 pm

Fascinating article on spotting mortgage fraud! The tips you shared, like checking property values and being wary of promises, are invaluable for brokers like myself. It's a constant battle against fraudsters, and your insights are crucial in protecting both clients and the industry. One question: have you encountered any specific red flags lately that you could share to keep us all extra vigilant?

Reply



Leave a Reply.

    News & Articles

    Industry updates, news, and content to help you elevate your mortgage broker business. 

    Archives

    May 2025
    April 2025
    March 2025
    February 2025
    January 2025
    December 2024
    September 2024
    August 2024
    June 2024
    April 2024
    March 2024
    September 2023
    August 2023
    July 2023
    June 2023
    May 2023
    April 2023
    March 2023
    October 2022
    July 2022
    November 2021
    October 2021
    October 2020
    September 2020
    August 2020
    July 2020
    April 2020

    Categories

    All
    Productivity

    RSS Feed

Alberta Mortgage Brokers Association
7326 10th Street NE, Suite 310   
​Calgary, AB T2E 8W1
Phone: 587.774.9828 
​Email: [email protected]
Picture
At the Alberta Mortgage Brokers Association, we acknowledge that our work in the housing industry is deeply connected to the land we call home. We recognize and pay tribute to the traditional territories of the peoples of Treaties 4, 6, 7, 8 and 10.  We also honour the Métis Nation of Alberta.  As we work to facilitate homeownership in Alberta, we remember that we operate on land that has been home to Indigenous peoples for generations.