Mortgage fraud is a serious financial crime in Canada that can cost you thousands of dollars and cause irreparable damage to your credit rating. To protect yourself and your property, it is important to be aware of the different types of mortgage fraud, how they work and how to avoid them.
The most common type of mortgage fraud in Canada is identity fraud. This occurs when someone uses your personal information to obtain a mortgage loan in your name without your knowledge or consent. Identity thieves may use your information to apply for a mortgage without your knowledge, or use it to refinance or take out a second mortgage on a property that you already own.
Another type of mortgage fraud is called equity skimming. This is when someone takes out a loan in your name, but does not make payments on it. They take the money and use it for themselves, leaving you with the debt and a damaged credit rating.
The best way to protect yourself from mortgage fraud is to be aware of the different types of scams and to take precautions to protect your information. Here are a few tips to help avoid mortgage fraud in Canada:
1. Be wary of any unsolicited offers. If someone contacts you and tries to pressure you into signing a loan agreement, this is a red flag.
2. Never give out personal information, such as your Social Insurance Number, credit card numbers or bank account information.
3. Do not sign any documents that you do not understand or that do not explain the terms of the loan.
4. Make sure that you are dealing with a legitimate lender. The Canadian Mortgage and Housing Corporation (CMHC) has a list of approved lenders in Canada.
5. Research the lender and read reviews before signing any documents.
6. Carefully read the loan agreement and make sure that all of the terms are clear and in writing.
7. Do not sign a loan agreement if there are any blank spaces or if you do not understand the terms.
8. Get a copy of the loan agreement and keep it for your records.
9. Never pay in cash for a mortgage loan. Always use a certified cheque or bank transfer.
10. Report any suspicious activity to the police or the CMHC immediately.
By following these tips, you can help protect yourself from mortgage fraud in Canada. Remember to always be vigilant and do your research before signing any loan agreement.