Recent revisions to the Notices of Assessment (NOA) issued by the Canada Revenue Agency have exposed the forms to greater risk of mortgage fraud instead of making the documents easier to use, according to the country’s foremost mortgage professionals’ organization.
In a letter addressed to Minister of National Revenue Diane Lebouthillier, the Canada Mortgage Brokers Association (CMBA) said that a significant portion of its membership is not too confident of the latest version of the NOA.
“We understand these new forms were introduced to make them simpler, less cluttered and better understood by the public, and more specifically, the individual tax payers who receive them. In our view, the new format of the NOA achieves these desired goals, and they are in fact, simpler and easier to read,” CMBA executive director Samantha Gale
wrote in the letter.
“However, the new form appears to have been overly simplified, in that many of the features of the NOA which make them harder to replicate or manipulate have been removed, making them an easily deployed tool for the perpetration of mortgage fraud,” Gale explained.
The CMBA noted that exposure to fraud has been one of the industry’s longest-running concerns, and that these risk factors erode the Canadian public’s confidence in mortgage professionals, industry regulators, private lenders, and financial institutions.
“NOAs are used to verify employment income in the mortgage application process by both lenders and mortgage default insurers, including the Canada Mortgage and Housing Corporation (CMHC). Fraudsters will often alter or create NOAs in order to qualify borrowers for mortgages for which they would otherwise not be approved,” Gale stated.
To address these loopholes, the CMBA petitioned Lebouthillier to consider additional safeguards to the documents.
“We recommend that … the new form be amended to contain identifying information relating to the tax payer, such as their name and social insurance number,” Gale wrote. “We recommend that the NOA be amended to add security features, such as the colour of the page coloured blue fading to white.”
The CMBA letter emphasized the ease of duplicating the existing version of the NOA, which incorporates the widely-used Helvetica as its primary font.
“We recommend that the NOA be amended to be written in a font which is not easily accessed by members of the public,” Gale said.