Teranet held the first Market Insight Forum of 2022 on March 29th. This forum was one of two focused on fraud in recognition of Fraud Prevention Month. The well-attended virtual event featured a panel of experts, hosted by Teranet’s Vice President of Property Solutions and Business Development, Colin Morris. Our panel of experts included:
- Stefani Konidis, Broker, Division Manager at Royal LePage Real Estate Services Ltd., Brokerage and Vice President at Johnston & Daniel
- Paul Taylor, President and CEO at Mortgage Professionals Canada
- Tannis Waugh, Barrister & Solicitor at Waugh and Co Professional Corporation
During the hour-long session the panel discussed fraud affecting real estate, mortgage, lending and legal professionals and flags to look for to avoid potential fraud.
Fraud is a continually growing concern to Canadians and industry professionals alike, which is why we first asked the panelists what kinds of fraud are prevalent in their respective industries right now. Our panelists provided these key takeaways:
- Canadian consumers need to ensure that they are working with a licensed mortgage broker to avoid providing a potential fraudster with personal information.
- Mortgage fraud can be as simple as lying on a mortgage application about the purpose of the property – which is why due diligence is so important for legal professionals.
- Urgency is a fraudster’s currency, and if there isn’t a valid reason for someone rushing to close a deal this may be a red flag.
- As direct deposits become more common, real estate brokerages should keep a close eye on these deposits to understand where they are coming from.
- The hot real estate market has led some individuals to try skipping due diligence steps in order to move quickly, which in some cases is leading to fraudulent activity
How can the industry work to mitigate fraud?
The need for the development of technology to protect and securely share client information is something all of our panelists agreed on. Tannis, Paul and Stefani all agreed that listening to your intuition as a professional involved in a real estate transaction is important, and if something doesn’t look right it’s worth digging into.
Tannis Waugh and Stefani Konidis also highlighted the importance of education for both consumers and the legal professionals and real estate sales professionals working on the frontline. Tannis spoke about how many Canadians don’t know that misrepresenting the intent of the use of the property is considered mortgage fraud. She added that “one of the things that should happen is education of the general public, to inform them what is considered mortgage fraud and what the consequences are if you get caught.” Tannis also believes in regular education about mortgage fraud for lawyers as well. Stefani mirrored Tannis’ comments by adding that “the best defense is deterrence” and highlighting the importance of educating agents about the proper place to go for property research.
Paul Taylor spoke about the three levels of underwriting that have to take place before funding occurs and states that “there’s already stringent processes in place” stating that the industry is doing a very good job to mitigate fraud.
In addition to these important insights, our panelists also discussed what Mortgage Professionals Canada is doing to work with the government to enhance mortgage fraud prevention, modifications recently made to Canada’s Proceeds of Crime and Terrorist Financing Regulations, fraud flags to watch for, the impact Covid-19 has had on fraud and much more. Click this link to watch the full recording of the Market Insight Forum.