Mortgage fraud overstated according to broker
September 14, 2018
Reacting to a recent article in this space, British Columbia mortgage broker Dustan Woodhouse claims that mortgage fraud in Canada is being overstated.
The August 28 Home BUILDER article reported that Canada Mortgage and Housing Corp. (CMHC) met with the Canada Revenue Agency (CRA) on the possibility of allowing lenders direct access to information on an applicant’s income in a bid to reduce mortgage fraud, which CMHC believes is a growing concern.
Currently, such tax information cannot be released by CRA to a third party.
“CMHC has approached the Canada Revenue Agency requesting it play a more direct and formal role in verifying the income of residential mortgage applications,” senior CMHC media spokesman Leonard Catling told Home BUILDER, adding “at this point we have no specific details or timeline.”
Woodhouse, a broker with Dominion Lending Centres argues that mortgage fraud is not a problem in the housing market.
“Mortgage fraud is a non-issue in Canada and the arrears rate largely bears that out,” Woodhouse said. He claims that, after handling 3,000 mortgage applications, he has seen only one case of fraudulent income.
Mortgage defaults in Canada are near historical lows, he added, and most delinquency is not the result of false statements of income.
“Arrears are triggered 99 per cent by the three Ds: death, divorce, and disability,” Woodhouse claims. “That’s the reality that I perceive, along with many very experienced mortgage brokers across Canada.”