An agent who spoke out against mortgage fraud in the industry clarifies his comments, following backlash from the broker community.
“I think first and foremost what was kind of taken a little bit out of context was my estimate of 1 in 5 (mortgages containing instances of fraud), which was based on an Equifax report as well as a Canada Guaranty study done in 2012 that said that 1 in 10 applications had some form of embellishment or fabrication,” Scott Nazareth, an agent with Dominion Lending Centres, told MortgageBrokerNews.ca. “I didn’t mean to insinuate that 20% of all mortgages in Canada were based on fraud. My intention was to speak openly and honestly about fraud in the industry.”
Published on February 17, a Better Dwelling article entitled “1 In 5 Canadian Homeowners Commits Mortgage Fraud, Says Top Broker” appeared to insinuate that a large number of fraudulent mortgages are originated by brokers.
It even featured a sub-section about “shady mortgage brokers.”
In the article, Nazareth mentions mortgage fraud is fairly prevalent in Brampton, a Toronto suburb, but he argues the piece focused too much on the mortgage broker industry and insinuated much of the fraud is perpetrated by brokers.
Sure, mortgage fraud occurs. But it certainly isn’t unique to the mortgage broker industry.
“What happened, unfortunately, the negative light was shone on the mortgage broker industry. That wasn’t my intention at all,” Nazareth explained. “I wanted to be a voice of honesty and integrity. It seems like the story was spun or at least reacted to in a negative way.”
A relative newcomer to the broker industry, Nazareth also took issue with the article that positioning him as an industry veteran, as well as a broker.
Since being published, Nazareth has received backlash from fellow brokers.
Others, however, have come to his defense and argued his original statements were taken out of context.