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Mortgage Broker News | 11 May 2010, 12:00 AM Agree 0
The RCMP are sifting through thousands of pages of documents to decide whether to pursue criminal charges in what is being touted as Canada's largest mortgage fraud case ever.
  • Sharon Thompson | 13 May 2010, 03:01 AM Agree 0
    As a player in the Mortgage Brokering Industy I have been originating mortgages for Canadians since 1999. Since then our regulatory changes have been tremendous, bringing honor and prestige to our profession. We are now governed by laws of disclosure, laws of protection and these laws demand that we work in the best interest of our clients, lenders and industry. Those mortgage brokers involved in this fraud scheme have taken a giant step backwards ... way back to the days when a mortgage broker was stereotyped as a "shyster" ... an unscrupulous yet last resort for the poor consumer with no other choice or understanding. All I can say to these modern day shysters in ... "We've come a long way! Our honest work, our integrity, our earned trust from our clients and lenders and contribution to our Canadian economy will not be jeopardized by the likes of you!" What possesses people like you to think you can commit fraud, whether it be against an individual or an entity as large as a Canadian Bank and NOT think that one day you will get caught?! May our governing body now show us and the world how it will deal with mortgage brokers and agents who put money before ethics. And then there are the lawyers ....
  • Me | 13 May 2010, 03:12 AM Agree 0
    sure - wink wink nudge nudge
  • FJ | 13 May 2010, 03:24 AM Agree 0
    This story is spooking the market. Think consumer confidence, investor confidence, etc.

    A news item remarkably similar to this one was put out at the very, very beginning of what ended up morphing into the U.S. subprime mortgage meltdown.

    Some later claimed that that initial news event (there was actually a series of apparently independent news events) was orchestrated by people, or more accurately people connected to others, who had taken massive short positions on the derivatative securities.

    It will be interesing to watch this unfold, keeping an eye on the macro effects including who stands to benefit from those effects. The few heads that are going to roll in Alberta over this, is not where we should be focussing our attention.
  • Carm | 13 May 2010, 04:21 AM Agree 0
    frankly i don't understand few things....BMO left the Broker channel about 5 or 6 years ago'...unless some BMO branches breacking their own rules !! are involved with the Mortgage Brokers....and the Bank ,always blaiming the Mortgage Broker,that without the "HELP" from inside cannot go nowhere...the news mention Brokers ,but doesn't says Mortgage Brokers or Real Estate Broker..!!
  • Mike From Canmore | 13 May 2010, 04:49 AM Agree 0
    11 years in this business does not make you a 'player", sweetheart. You haven't even seen a downturn in real estate values & thus the mortgage market, never mind a recession of the likes of the early 80's or 90's.When you survive those & still have a client base, your morals/ethics, & your business, intact, you can call yourself a player.

    You can have all the laws & rules you want, but when the barriers to entry are a 5 day course for licensing and a one day course to buy the "instant authority" of three letters after your name, and there is a good buck to be made, "the pirates" will be there.
    As to "our" governing body, PLEASE! They are too busy counting the money from the sale of another 3 letter designation to a cab driver on Front St.
  • Kevin | 13 May 2010, 04:52 AM Agree 0
    Yup & the hits just keep coming! And why? Because the Financial Institutions have never had a policy of cooperating with local and federal authorities on large scale corporate fraud crimes. Whatever took BMO so long to get RCMP & local corporate crime officers involved should be a crime itself. Not only do they have high mortgages on over inflated properties but this also impacts the credibility of legit realestate transactions for all the other sales in the area where a lot of this over inflating happened. These are the true victims. How do we know if other Banks dont have the same type of skewed portfolios because of this no cooperation with authorities behaviors Banks have historically exhibited.
    I'm sick to hear about the straw borrowers whining about being victims & gulible new immigrants not knowing any better. I hope Revenue Canada are taking note of the list of straw borrwers involved & seeing if they declared the income & for those new immigrants who didnt declare, prepare the papers kicking them out of our country.
    We as an industry have had fraud seminars and workshops, required liscencing courses that all addressed fraud & straw borrowers. Why did it stop with just us & not taken further to educate the public?
    I do know one thing. The stupid lending practices and lack of common sense by the Banks that enabled the Broker Industry to the heights we have attained,will be back, with us being part of it. Oh goody!
  • Dan Mack | 13 May 2010, 04:56 AM Agree 0
    Just looked over the defendant list on line and saw only one mortgage broker name. The rest of the names are very revealing. If you can add 2+2, you can easily see what happened.
  • joe | 13 May 2010, 05:36 AM Agree 0
    So you blame the crooks? should be declared entrapment.
    it's like leaving a cash register outside a 7 eleven and
    wonder why it was robbed. It is so simple, because of the
    bank policies and procedures, oh and cmhc with the "ëmily"
    appraisal system. come on!! The straw buyers new exactly
    what was going down. why? Greed. Lawyers? shit, they need
    crooks to survive. Greed. Brokers are a necessity cause your
    average mortgage seeker does not know how to approach a tired, angry, control freak who does not want to be working for a bank. They want to own one. Have you ever asked for a loan and then realize you have caught a banker on a bad personal day? Then you know!
    How many mortgages would be out there, families owning their homes instead of renting, mortgages being paid on time by people who were turned down by banks? There are many, many more paying than those went bad. I do not condone these frauds but it should be tightened up a bit.
  • Dave | 13 May 2010, 05:43 AM Agree 0
    Time for a house cleaning in the way mortgages are processed & insured in Canada.
    1)We really don't need 48 hour approvals. In other Western nations it can be weeks from app to commitment.If it is your biggest investment then take the time to think about it.People will have to learn to live with it.
    2) Do away with CMHC's EMILI- require an inspection or "real" appraisal of all properties. License appraisers across Canada.
    3) If a deal is CMHC insured the FI's should be required to have "skin in the game",i.e. some measure of financial risk.They do if they insure with the other two major insurers. As it stands now CMHC writes the lender a chque for virtually every penny of loss,& if they run out of money they come to the taxpayer to cover the shortfall. The FI's make loads of money MBSing the deals out the back door.You would have to be a total screw-up not to make a fortune doing mortgages like this.
    4) require the licensing of all bank road reps as mortgage agents/brokers.Seen too many deals processed by these clowns get approved & closed, yet within 3 to 6 months the house is under POS, & the sale that they financed was a boost & flip.
    5) From 2004 to 2008 FI's were processing a huge number of deals with a large number of staff that had less than optimal training/experience.Everyone from the President to the road rep was getting huge commissions or bonuses. Now as the frauds,& possibly defaults, come home to roost, the lenders scream & start laying charges, I guess even a hooker has a right to scream "sexual assault".
    6) The cops are not in a hurry to lay criminal charges when the lender has not done adequate due diligence. If the lender /CMHC does not require a proper physical inspection of the property & relies on a computer system that has significant shortcomings in determining accurate values & the lender does low/no documentation/verification loans & the bigest priority is pushing volume. I can see why the cops might have a hard time believing they will get a conviction. Hard to have empathy with huge organizations that have the money & the capability to do the job right, but they reduce their potential for profit if they do so.
    7) Where the hell was OSFI for the last 5 years?Are they fulfilling their role as the FI"s watch dog? They didn't catch this, did they?
  • player | 13 May 2010, 11:16 AM Agree 0
    Mike, "sweetheart" get a grip on spewing offenses on someone who is professing integrity rather than making excuses and shifting focus to the definition of who gets to call themselves a player and then laughably to imply that it is bad times that spurn fraud and surviving them entitles you to player status.. seriously get your head out of ... the sand.

    Btw you've also missed the forest for the trees on your thorough lack of knowledge on licensing in the province of Alberta, as well as others... not that there is anything to do with that and a fraud emanating from I guess who the real players are in the market... and here I thought you were a real player.
  • spooking the markets and consumers? | 13 May 2010, 01:02 PM Agree 0
    I would have thought maybe the crisis in Greece and the other European countries at risk of defaulting on their sovereign debt and seeing europe fall like a house of cards, thankfully it was this mortgage fraud stuff. I can sleep at night now...thanks.
  • Paul Sidhu | 14 May 2010, 01:15 AM Agree 0
    Instead of fighting each other, we should join and fight the banks. They have no accountability and they are overseen by ombudsman that are on their payroll. This in essence is a conflict of interest on its own. As long as the money is rolling in and quota's are being met, the ombudsman is happy becuase the banks are happy. Banks should have more accountablity and fall under FSCO's or FICOM's regulations. Right now, people offering mortgages at the banks can say or do whatever they like and get away with it. I had a banker tell a client that he would have to pay $8000 in penalties and discharge fee's even though the clients mortgage was up for renewal. The discharge fee was only $225 but the client fell for it and stayed with the bank and paid a higher interest rate. When I spoke to the ombudsman about the unethical behaviour of the banker, he brushed me off. WHERE IS THE ACCOUNTABILITY?
  • sharon | 14 May 2010, 03:56 AM Agree 0
    ... I guess I AM a bit of an idealist. I thought the days of being called "sweatheart" and "honey" were over. The "boy's club" lives on! And I was in the housing industry in the early 90s when builders handed over their spec homes to trades they couldn't afford to pay before walking from the subdivisions. And as far as the defendant list ... in the eyes of the public one is enough.
  • Jay | 14 May 2010, 12:22 PM Agree 0
    5 days course and u r left alone 2 join a brokerage and start working yourself .Handing over licences to real estate people without any courses .We are saying 5 days course is not enough and majority will agree as they cannot provide services . Only a broker with experience should be allowed to pull credit and make decisions on how to handle the case while the agent is learning how to process . Part timers even forget passwords when a mortgage comes to them after a while .Brokerages should hold mini seminars to inform their agents of any changes in the industry , constant training must be mandatory to keep up with the industry. A team of agents should work with one fully trained and full timer agent or broker . In this an agent is trained and they have someone to get advice specially if they are doing it part time.
  • Mickey | 04 Jun 2010, 04:15 AM Agree 0
    Some really great comments.

    I too have gone through the court documents and see only one Mortgage Broker named. Does that tell me that AMBA (Alberta Mortgage Brokers Association) is doing a good job in terms of education and awarness to their members regarding Fraud? It bothers me to read the news saying Mortgage Broker(s) are involved.

    We (Mortgage Brokerage Comminity) need to work with the lenders,and the lenders to a point do work with the stakeholders and governing bodies. Clearly more work needs to be done!

    BMO in some way are breaking new ground here by going after these people. I do beleive this type of business has happened or is happening with other financial institutions... we just aren't aware of it yet!?
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