Mortgage Fraud Prevention

Mortgage Fraud Prevention

To report any suspicion of mortgage fraud or misrepresentation, please contact our team at:

Mortgage fraud can be defined as any material misrepresentation on a loan application that influences a mortgage lender to approve an application that would have otherwise been underwritten differently, or even declined. This includes intentionally withholding information that should have been disclosed to a mortgage originator.

Mortgage fraud is becoming a growing concern to all in the residential mortgage business as well as the general public. Increased awareness and vigilance through ongoing training of mortgage professionals and stakeholders is viewed by Canada Guaranty as key in stemming the problem at origination.

Mortgage fraud affects consumers, communities and the lending industry in various ways, with costly results for everyone – except the perpetrators of the crime. Knowing what mortgage fraud is, how it works and how to recognize it is necessary for its prevention. This places more emphasis on the consistency of information supplied to mortgage originators than ever before.

When a loan originator suspects fraud, some of the key questions to ask include the following:


  • Is the distance from the applicant’s present employment to the property being purchased reasonable?


  • Is the down payment consistent with the borrower’s income?
  • If gifted, are there other liquid assets which have been declared that could have been used instead?


  • Is the income stated consistent with the type of occupation and the applicant’s job tenure?
  • Does the date of hire fall on a weekend or holiday


  • Is the signatory to the employment letter using a generic title, for example, “Manager”, “Administrator”, or “Accountant”?
  • Is the company’s phone number a cell phone?
  • Is the job tenure consistent with the borrower’s age?


  • Is the borrower buying an investment property, but currently renting the present home?
  • Is the borrower buying the property from the current landlord?


  • Have the trade lines been opened over time, or have they all been opened at the same time, and recently?


  • Is the property available on MLS?
  • If the sale is private, is it arm’s–length?
  • Is the deposit going to the vendor instead of a trust account with a solicitor?


Upon discovery, all instances of mortgage fraud or misrepresentation should be reported to Canada Guaranty. Through ongoing discussion and the sharing of critical information, we are committed to working with our industry partners to combat this growing problem. If you require more information about the prevention of mortgage fraud or feel you and your team would benefit from additional training on mortgage fraud awareness and prevention, please contact your local Canada Guaranty Account Executive.

All fraud tips and reports may be e-mailed to: