Industry fraud allegations underlines need for accurate documentation

Industry fraud allegations underlines need for accurate documentation

Industry fraud allegations underlines need for accurate documentation Recent fraud concerns have highlighted the industry’s growing emphasis on accurate and up-to-date client documentation, especially for self-employed clients, say broker channel veterans.

“Documentation tells us a lot about which solution will be most suitable for the client,” says Tom Hickey, vice president of operations with B2B Bank. “We need know as much as possible about the documentation available to prove the client’s income.”

This challenge to meet the lending guidelines is driven by a number of variables, says Hickey.

“For instance, reductions in loan-to-value, increased documentation requirements and higher loan rates,” says Hickey. “The steady decrease in mortgage options such as extended amortization also plays a factor. As a result, fewer lenders are offering flexible options in this sector.”

The issue of industry accountability came to the forefront recently when a major lender severed ties with 45 brokers who allegedly had falsified income documents, after an investigation pointed to falsified information about borrowers’ income.

Some industry players are arguing that in cases of accusations of fraud, the borrower should be held accountable more so than the broker.

“Everybody talks about fraud but nobody does anything about it,” Mortgage Alliance’s Ad Lakhanpal told “My recommendation is that they shouldn’t go after the broker who signs the documents; (focus on) the borrower who signs off on the information saying it’s true.”

For Hickey, brokers need to be vigilant and aware of exactly who their clients are, and what their business is all about – and to understand what the lender is looking for in an application.

“I can’t stress this enough: do your research about the lender you are submitting your applications to,” he says. “Take some time to learn about the product offering, and specifically name the lender’s product in your applications.”
  • Tomas 2015-08-14 10:17:32 AM
    No need to worry about this. White collar crime isn't considered a serious offence in Canada. No person has been sentenced to a single day of jail time for fraud in the last 30 years. Many prosecutions, but no jail time.
    Post a reply
  • Gary Chungh 2015-08-14 10:43:06 AM
    Its going to be more miss up, as we see rate war and this mortgage industry, customer don't have any respect so far. Expectations are so high and no one wants to take responsibility nor the customer and nor the lender.
    Post a reply
  • Paul 2015-08-14 8:25:27 PM
    I HEARD that some banks staff will tailor make clients income and employment information to qualify mortgage.

    Some bank staff, not made for client but will turn a blind eye on information and document from client.

    How to verify the client employment ? Is it enough to call his office and verify with his boss about his employment ? Who knows if his boss is REAL ??

    Mortgage broker is not GOD and we do see people's mind, right ?

    If the lender thinks the document is falsified, report to police because it is crime, don't just chase the mortgage broker !
    Post a reply