Consumers should be aware of the red flags that may indicate a mortgage fraud. The existence of red flags does not guarantee a fraud, however it should be cause for suspicion. If there are more than 2 or 3 red flags in a transaction they should be taken seriously.
Common red flags include:
- someone offers you money to use your name and credit information to obtain a mortgage
- you are encouraged to include false information on a loan application
- you are asked to leave signature lines or other important areas on a loan application blank
- the loan amount on the mortgage is significantly higher than the value of the property
- the mortgage has been refinanced several times and in each instance, the amount of the mortgage has increased
- the seller or investment adviser discourage you from seeing or inspecting the property you are offering to purchase
The Real Estate Council of Alberta (RECA) has a detailed list of red flags in several categories.
If you have found false or misleading information with your transactions, contact the lender and tell them about your findings. If the persons involved are industry members (real estate associates/brokers, mortgage associates/brokers or real estate appraisers), report the situation to RECA in writing.
If you suspect fraudulent and/or other illegal behaviour, contact your local police, RCMP and RECA.
What’s important to know
- law enforcement officials and lenders believe that 10-15 per cent of all mortgage applications contain false information
- lenders can and do sue individuals who participate in mortgage fraud
Contact this service
(Edmonton and area)
(toll-free, other areas in Alberta)
8:15 am - 4:30 pm (Monday to Friday, closed statutory holidays)
Mortgage fraud tipsheet (PDF, 4 pages)