Mortgage fraud has become big business in Canada, with a 150 per cent rise in criminal transactions detected just in the last year, according to the credit reporting agency Equifax.
“The schemes are getting so increasingly complex, there is no doubt that organized crime is involved,” says John Russo, chief legal counsel and privacy officer for Equifax Canada.
“They are working with individuals, even from jail, to come up with schemes that are bigger and better than the last.”
The levels of fraud have been escalating so wildly since 2008, Equifax has started working hand-in-hand with major lending institutions trying to flag fraudulent loans before money is handed over, Russo said in an interview Tuesday.
Largely as a result of those efforts, Equifax helped detect a $2.8 million escalation in attempted mortgage fraud just in the last year, he noted.
The biggest frauds have been recorded in Ontario and Quebec, said Russo, but schemes are playing out right across the country, often leaving innocent consumers and lenders in their wake.
Canada’s unusually hot market — where real estate values have doubled or even tripled in some parts of the country over the past decade — has led to an increase in U.S.-style “liar loans” where homeowners exaggerate their incomes, or years on the job, to get loans for houses they really can’t afford, Equifax has also found.
Other fraudulent schemes can include identity theft that defrauds a legitimate owner out of their home or builders who borrow citing inflated values of the units they are building, only to cut and run before the project is completely built or sold out, says Russo.
“These are very patient people. They can take a year or more to build up credit under fictitious names, starting with credit cards and working up to lines of credit. But we’re seeing a trend toward quicker hits where they can net $200,000 or $300,000 per fake identity, more than most people make on their jobs in a year.”
One thief was so brazen, he tried to borrow money through a number of institutions using the identity of a Robert Consumer — the name, and even address, used by rival credit rating agency TransUnion on some of its promotional brochures, says Russo.
In all, Equifax helped detect a “staggering” $650 million in attempt fraudulent activity across Canada last year — from credit card applications to fraudulent loans — a total of about $1.7 million per day.
Original Article
Source: Star
Author: Susan Pigg
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