>Alberta 'top target' for mortgage fraud

May 7th

The Bank of Montreal recently filed a lawsuit alleging a $120 million mortgage fraud. The fraud, considered to be the largest in Canadian history, is alleged to have been conducted by bankers, lawyers, people posing as home buyers and more. The story garnered much attention across the country – but, according to an article in the Calgary Herald, it's only the latest in a long string of mortgage fraud in that province.

The story describes the most common method of mortgage fraud this way:

“Mortgage fraud typically involves using falsified documents to inflate the value of a home. The fraudster then takes the loan out in the name of a naive 'straw-buyer,' someone who receives a fee to sign for the mortgage. The true owner may rent the property, use it as a marijuana grow operation or simply default, leaving the duped mortgage holder to pay the remainder of the loan, which is often more than the actual value of the property. Banks also often take the financial hit.”

This has been going on for at least 20 years; Alberta's boom and bust economy makes it an especially hot place for such crimes. Although the province has examined new procedures that would watch for suspicious activity (such as frequently flipped houses), these have not yet been adopted.

These days, even the biggest banks in the country can be the unwitting victims of fraud. It's important to keep tabs on your credit report and credit activity at all time – catching fraud in the early stages can be your best defence.