Tips to prevent mortgage fraud

To verify income

 

1.	Make sure that the employer listed on the application actually exists. Based on the income confirmation letter, use the reverse directories on www.canada411.ca or myTELUS where you enter the phone number or address to find the company.
2.	Call the employer's payroll or human resources department and verify the information contained in the income confirmation letter.
3.	Google or MapQuest the company to make sure the address is appropriate for the type of business.
4.	Check on Careerowl.ca to ensure that the earnings claimed are reasonable for the profession or region.

 

To verify the down payment

 

5.	Make sure that the full source of funds for the down payment is documented.
6.	Beware of the down payment being the deposit with the offer: verify that the borrowers had the funds in their position and that the funds were not borrowed.
7.	Where the down payment source is a gift, the donor's name, address and phone number should be provided in the gift letter, together with indication of their relationship to the borrower (immediate family only).
8.	Do not accept internet downloads of bank statements.
9.	Watch out for math errors on bank, investment, and RRSP statements. Mistakes are a red flag that the statements may not be legitimate.
10.	Ensure the void cheque cross references to the account number, bank and branch. Verify that the branch of the financial institution actually exists.

 

To verify the MLS listing

 

11.	Use mls.ca to verify that the property has been listed on the real estate board's system.
12.	Ensure all fields are complete on MLS (realtor name, firm, phone number, contract date, expiry, etc).
13.	Review the offer to purchase and ensure you have all schedules.
14.	Know your real estate market. Does the sale price seem reasonable to the area?
15.	Does the vendor's surname match the purchaser's? If this is a non-arm's length purchase, was the deposit paid to the relative?
16.	If it's a private sale, obtain information about the property by completing the private sale checklist. See the form within CAAMP's Origination Standards for Fraud Avoidance.

 

Other things to watch for

 

17.	Are chattels involved? Deduct these from the purchase price (nominal values are usually acceptable).
18.	Are there purchase incentives? If there are bonuses for purchasing such as a car, appliances or furniture, treat these as chattels and deduct their value from the purchase price.
19.	Watch for special conditions. For example, is there work to be completed before closing? Are there kickbacks or rebates to be made after completion?
20.	Have you seen more than one file per year with the same vendor, purchaser or address? Is the purchaser acquiring a portfolio of rental properties?
21.	Watch out for the combination of a quick closing with a conflict of interest (non arm's length, double ended or dual agency). This is a tell tale sign of a fraud file.

 

Posted via email from pamdaniels's posterous