39 Questions
What is a common feature of many mortgage fraud schemes?
Inflating a property's value
What should be done to identify whether a property exists in the case of Air Loans?
Check online tools like Google Maps or Street View
What is a red flag for Appraisal Fraud according to the text?
Unknown occupancy status indicating possible fraud
Why are homeowners who rent out their homes or have no existing mortgages vulnerable to Title Fraud?
Because they have high-value properties
What is an obligation of a mortgage professional to the borrower?
To provide suitable mortgage options based on the borrower's situation
What is crucial for a brokerage working with sensitive customer data?
Implementing mechanisms for protecting customer data
What could be considered personal information according to the text?
Marital status and medical history
What is the motivation behind private lending fraud schemes according to the text?
'Motivation' as an internal process sustaining goal-oriented behaviors
Why should mortgage professionals start their relationship with borrowers on the right foot according to the text?
'Transparency on both sides is important for a successful transaction'
What should mortgage agents/brokers do to prevent fraud according to the text?
'Report any suspicious activities that could lead to crime'
What is mortgage fraud?
The deliberate use of misstatements, misrepresentations, or omissions to fund, purchase, or secure a mortgage
Who has a particular duty and opportunity to detect mortgage fraud?
Mortgage agents and brokers
What is essential to detect potentially fraudulent activities and prevent them from going any further?
Understanding what mortgage fraud is and how the schemes work
What can mortgage fraud range from?
Individuals giving false information in the loan application to groups of fraudsters acting together to artificially inflate or deflate property values
What are some of the consequences of failing to detect mortgage fraud?
Legal action and financial losses
In 2010, which bank was the victim of a massive mortgage fraud losing around $30 million?
BMO
What are some reasons someone would commit mortgage fraud?
Greed, financial difficulties, maximizing profits, etc.
Who are the first and main contact with borrowers in the mortgage process?
Mortgage agents and brokers
What should mortgage agents and brokers apply and diligently follow to combat mortgage fraud?
'Several practices'
Who are at risk of mortgage fraud similar to traditional lending?
'Private lending'
What is mortgage fraud?
A criminal offense involving deceit, falsehood, or fraudulent means to obtain property, money, or valuable security
Which of the following is NOT a form of mortgage fraud mentioned in the text?
Providing accurate and complete information on a mortgage application
According to the Criminal Code of Canada, what are the penalties for fraud?
Up to 14 years in prison for amounts over $4,000 and up to two years for amounts under $5,000
What percentage of millennials believe it's acceptable to inflate their annual income when applying for a mortgage?
23%
Who are the potential victims of mortgage fraud mentioned in the text?
Homeowners, buyers in a neighborhood or condo complex, and the public near clandestine drug labs and grow operations
What role do mortgage professionals play in combating fraud?
They are the first line of defense against fraud and must be thorough and diligent in reviewing mortgage applications and supporting documents
What are some of the costs associated with mortgage fraud mentioned in the text?
Operational Costs, Reputational Costs, and Public Costs
What is the potential impact of technology on combating mortgage fraud?
Technology makes it easier to perpetrate fraud due to automation and speedy processing expectations
What is the significance of the internet in facilitating mortgage fraud?
The internet enables fraudulent access to the land registry system and provides tools to create false financial documents
What penalties does the Criminal Code of Canada specify for mortgage fraud?
There are no penalties specified for mortgage fraud in the Criminal Code of Canada
What is the responsibility of mortgage industry professionals with regards to their client's information?
To protect the information and be the guardians of the data
Which principle emphasizes that an organization must be responsible for personal information under its control?
Principle 1: Accountability
What is required for the collection, use, or disclosure of personal information according to Principle 3?
Individual's knowledge and consent
Which principle emphasizes that personal information must be protected by appropriate security relative to the sensitivity of the information?
Principle 7: Safeguards
Which key takeaway is recommended to help identify potentially fraudulent activities?
Verify the identity of each applicant face-to-face when possible
What must mortgage agents and brokers ensure they verify for each transaction?
The details of the property being sold
How can mortgage professionals reduce the risk of mortgage fraud?
By putting good underwriting practices and tools in place
What is used to record the ID presented by each applicant?
An identification attestation document
"If you suspect fraud, follow the procedures of the brokerage for handling suspicious transactions." This statement relates to which key takeaway?
"Follow the procedures of the brokerage for handling suspicious transactions"
Test your knowledge about private lending mortgage fraud schemes and appraisal fraud, which often involves inflating a property's value and misleading real estate appraisals. Learn how to identify and prevent appraisal fraud by carefully reading appraisals and using software to check property values.
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