High-risk and suspected fraudulent mortgage activity is on the rise, says Equifax Canada, which finds there has been a 52% increase in suspected fraudulent mortgage applications since 2013.
According to system data from Equifax, falsified account statements and documents are increasingly being flagged, as is conflicting information. Of the applications being flagged, 67% were from Ontario while 12% were from B.C.
Equifax also conducted a survey to examine the attitudes and perceptions of Canadians about the current housing market. It finds one in five Canadians who do not have a mortgage say they’re nervous they’ll never own a home because of rising prices. Further, they want to buy a home but can’t afford the down payment.
Read: Housing affordability reaches worst level in 8 years: RBC index
The survey was conducted online using Leger’s weekly OMNI via LegerWeb. It polled 1,547 Canadians from across the country.
“We’re certainly seeing more mortgage applications being flagged as suspicious by our reporting institutions,” says Tara Zecevic, vice president, Customer Insight, at Equifax Canada. “We cannot entirely attribute these increases to consumers overstating personal income or falsifying applications, [but] we do want to remind people that there are serious consequences for making false or inaccurate claims on any loan or mortgage applications.”
With respect to mortgage fraud, the results of the recent Equifax survey show 13% of Canadians indicate it’s acceptable to tell “little white lies” when applying for a mortgage to get the houses they want.
As well, 16% said they believe mortgage fraud is a victimless crime and 8% admitted to misrepresenting the facts on a credit or loan application.
Read: Not all mortgage rate hikes are created equal
Homes too expensive
When asked about housing prices and markets, respondents of the Equifax survey said:
- the cost of home ownership is too high for first-home buyers today (84%); and
- there’s more demand than supply (29%) and more foreign buyers (27%); both are factors that are driving up home prices according to respondents.
The survey notes B.C. residents are significantly more likely to cite foreign buyers as the top reason for home prices being driven up (75%, versus 42% for all other provinces, respectively).
Brace for Vancouver, Toronto housing slowdown: TD
Foreign vs. domestic condo buyers: who’s more active in GTA?