Equifax is reporting that mortgage fraud is on the rise in Canada — especially in Ontario and British Columbia — due in large part to rising home prices.
The agency, which maintains credit reports on consumers and businesses, states that the number of mortgage applications agged as potentially fraudulent has risen 52 percent since 2013. Equifax collects information on suspected mortgage fraud from lenders, mortgage insurers and banks that have identified suspicious applications.
A new lending rule is seen as one of the reasons for increasing fraud. Lenders now must run a stress test to ensure borrowers can handle mortgage payments based on the Bank of Canada’s posted five-year fixed interest rate. This is putting more pressure on buyers to alter their mortgage applications to get approved for a loan.
Instances of mortgage fraud were highest in the markets that are also the most attractive to foreign buyers, Equifax reports. ◊