The suspension of a Vancouver notary over possible mortgage irregularities underlines the need for brokers to uphold standards of professionalism and integrity, says MBABC CEO Samantha Gale.
“In every industry there are individuals who steal client funds and commit fraud – hopefully they are few and far between,” says Gale. “When mortgage brokers are choosing a lawyer or notary to handle a conveyancing transaction, they should ensure that the lawyer or notary has proper systems in place to handle the transaction.”
The Society of Notaries Public of B.C. suspended Vancouver notary Agatha Chung after finding financial irregularities in several client files after an investigation begun in late March.
“I have no knowledge of anyone, including mortgage brokers, who have used Agatha Chung,” says Gale.
Society president John Eastwood said it appears Chung accepted money from lenders on her undertaking to pay off mortgages, but failed to do so. Under the B.C. Notaries Act, notaries are authorized to provide a wide variety of services, including documentation for property transfers and mortgage refinancing.
He said the society's investigation is still at an early stage, but at this point irregularities have been discovered in about a six files and the total amount of money involved is in the “seven figures.”
According to Eastwood, this type of malfeasance is extremely rare among B.C. notaries, with the last such similar case happening some 28 years ago.
Gale says there is recourse for those who have been a victim of fraud.
“We are fortunate that instances of fraud and missing client monies during the conveyancing process are relatively infrequent in B.C.,” she told MortgageBrokerNews.ca.” There are also special funds in place in which the public can make claims to recover missing monies from lawyers or notaries. So the public can have some peace of mind that they will be protected in the event of wrong doing in the conveyancing process.”
Although not all fraud can be detected, there are some signs that should raise a red flag, says Gale.
“If a lawyer or notary asks a client to sign a blank document, the client should refuse to sign the document,” she says. “This kind of a request is a red flag that something is wrong – a sign that the conveyancing professional has sloppy practices at best and potentially there could be a more serious problem involving dishonesty at worst.”
Gale urges caution, urging brokers to make sure clients always understands what they are signing.
“If something does not make sense or seems to be inaccurate or incomplete, they should refuse to sign until they are satisfied with the process and documentation.”
Putting the Internet to use can be the first, best weapon.
“The client may want to look up a lawyer or a notary on either the Law Society or Notary Society website to see if they have any disciplinary record,” says Gale. “The client can also Google the lawyer or notary to see if there are any customer reviews of the lawyer or notary.”