A handful of con artists misusing the rent-to-own model are increasingly running afoul of provincial mortgage broker legislation, claiming they can arrange home loans without broker accreditation.
“Unfortunately it is not uncommon,” CAAMP CEO and President Jim Murphy told MortgageBrokerNews.ca. “It is the second or third source of complaints in Ontario (unlicensed activity). It sends a message that people should use licensed Realtors and brokers.”
A new CBC report is detailing the growing number of websites popping up and offering to bring together buyers and sellers in rent-to-own deals, an enticing offer for buyers who can’t get conventional financing and owners who can’t sell in slow market. They are distinctly different from the many reputable rent-to-own programs that operate within the law, many relying on mortgage professionals to refer deals.
Still some sites specifically claim to arrange mortgages, outside the involvement of brokers.
“There’s no accountability with this kind of system,” Samantha Gale of the Mortgage Brokers Association of B.C. told CBC investigative news unit Go Public, spurring Go Public to begin inquiries about a specific website in that province.
Gale later reported the rent-to-own website to that province’s mortgage regulator over her concerns of unregulated operators leaving clients without recourse when deals go south.
“You don’t have some kind of standards which are adhered to and you don’t have any kind of recourse” by not using an accredited broker or agent, said Gale.
The site states, “Whether you are buying or selling, need a mortgage (or a second mortgage)… our sole purpose is to be at your service.” The website goes as far as to invite financing for mortgages from potential investors: “If you have some available funds to lend… we will contact you soon.”
The website is still active, touting itself as “Your Local Real Estate Professionals.”
“Certainly CAAMP has a role to help police in this,” said Murphy, “and the public needs to ensure they are dealing with professional people.”