Module 7 - Mortgage Fraud Schemes and Appraisal Fraud

Play an AI-generated podcast conversation about this lesson

What is a common feature of many mortgage fraud schemes?

Using reliable real estate appraisal systems

Providing accurate valuation reports

Respecting the three designations recognized by the Appraisal Institute of Canada

Inflating a property's value (correct)

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 (correct)

Ask the buyer to verify the existence of the property

Always conduct an appraisal

Rely on the professional appraisal designations

What is a red flag for Appraisal Fraud according to the text?

Property listed as vacant when it's actually occupied

Unknown occupancy status indicating possible fraud (correct)

The concluded market value is consistent with the neighborhood description

Altered or incomplete appraisal report

Why are homeowners who rent out their homes or have no existing mortgages vulnerable to Title Fraud?

Because they have high-value properties Signup and view all the answers

What is an obligation of a mortgage professional to the borrower?

To provide suitable mortgage options based on the borrower's situation Signup and view all the answers

What is crucial for a brokerage working with sensitive customer data?

Implementing mechanisms for protecting customer data Signup and view all the answers

What could be considered personal information according to the text?

Marital status and medical history Signup and view all the answers

What is the motivation behind private lending fraud schemes according to the text?

'Motivation' as an internal process sustaining goal-oriented behaviors Signup and view all the answers

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' Signup and view all the answers

What should mortgage agents/brokers do to prevent fraud according to the text?

'Report any suspicious activities that could lead to crime' Signup and view all the answers

What is mortgage fraud?

The deliberate use of misstatements, misrepresentations, or omissions to fund, purchase, or secure a mortgage Signup and view all the answers

Who has a particular duty and opportunity to detect mortgage fraud?

Mortgage agents and brokers Signup and view all the answers

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 Signup and view all the answers

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 Signup and view all the answers

What are some of the consequences of failing to detect mortgage fraud?

Legal action and financial losses Signup and view all the answers

In 2010, which bank was the victim of a massive mortgage fraud losing around $30 million?

BMO Signup and view all the answers

What are some reasons someone would commit mortgage fraud?

Greed, financial difficulties, maximizing profits, etc. Signup and view all the answers

Who are the first and main contact with borrowers in the mortgage process?

Mortgage agents and brokers Signup and view all the answers

What should mortgage agents and brokers apply and diligently follow to combat mortgage fraud?

'Several practices' Signup and view all the answers

Who are at risk of mortgage fraud similar to traditional lending?

'Private lending' Signup and view all the answers

What is mortgage fraud?

A criminal offense involving deceit, falsehood, or fraudulent means to obtain property, money, or valuable security Signup and view all the answers

Which of the following is NOT a form of mortgage fraud mentioned in the text?

Providing accurate and complete information on a mortgage application Signup and view all the answers

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 Signup and view all the answers

What percentage of millennials believe it's acceptable to inflate their annual income when applying for a mortgage?

23% Signup and view all the answers

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 Signup and view all the answers

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 Signup and view all the answers

What are some of the costs associated with mortgage fraud mentioned in the text?

Operational Costs, Reputational Costs, and Public Costs Signup and view all the answers

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 Signup and view all the answers

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 Signup and view all the answers

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 Signup and view all the answers

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 Signup and view all the answers

Which principle emphasizes that an organization must be responsible for personal information under its control?

Principle 1: Accountability Signup and view all the answers

What is required for the collection, use, or disclosure of personal information according to Principle 3?

Individual's knowledge and consent Signup and view all the answers

Which principle emphasizes that personal information must be protected by appropriate security relative to the sensitivity of the information?

Principle 7: Safeguards Signup and view all the answers

Which key takeaway is recommended to help identify potentially fraudulent activities?

Verify the identity of each applicant face-to-face when possible Signup and view all the answers

What must mortgage agents and brokers ensure they verify for each transaction?

The details of the property being sold Signup and view all the answers

How can mortgage professionals reduce the risk of mortgage fraud?

By putting good underwriting practices and tools in place Signup and view all the answers

What is used to record the ID presented by each applicant?

An identification attestation document Signup and view all the answers

"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" Signup and view all the answers

Module 7 - Mortgage Fraud Schemes and Appraisal Fraud

Choose a study mode

Podcast

Questions and Answers

What is a common feature of many mortgage fraud schemes?

What should be done to identify whether a property exists in the case of Air Loans?

What is a red flag for Appraisal Fraud according to the text?

Why are homeowners who rent out their homes or have no existing mortgages vulnerable to Title Fraud?

What is an obligation of a mortgage professional to the borrower?

What is crucial for a brokerage working with sensitive customer data?

What could be considered personal information according to the text?

What is the motivation behind private lending fraud schemes according to the text?

Why should mortgage professionals start their relationship with borrowers on the right foot according to the text?

What should mortgage agents/brokers do to prevent fraud according to the text?

What is mortgage fraud?

Who has a particular duty and opportunity to detect mortgage fraud?

What is essential to detect potentially fraudulent activities and prevent them from going any further?

What can mortgage fraud range from?

What are some of the consequences of failing to detect mortgage fraud?

In 2010, which bank was the victim of a massive mortgage fraud losing around $30 million?

What are some reasons someone would commit mortgage fraud?

Who are the first and main contact with borrowers in the mortgage process?

What should mortgage agents and brokers apply and diligently follow to combat mortgage fraud?

Who are at risk of mortgage fraud similar to traditional lending?

What is mortgage fraud?

Which of the following is NOT a form of mortgage fraud mentioned in the text?

According to the Criminal Code of Canada, what are the penalties for fraud?

What percentage of millennials believe it's acceptable to inflate their annual income when applying for a mortgage?

Who are the potential victims of mortgage fraud mentioned in the text?

What role do mortgage professionals play in combating fraud?

What are some of the costs associated with mortgage fraud mentioned in the text?

What is the potential impact of technology on combating mortgage fraud?

What is the significance of the internet in facilitating mortgage fraud?

What penalties does the Criminal Code of Canada specify for mortgage fraud?

What is the responsibility of mortgage industry professionals with regards to their client's information?

Which principle emphasizes that an organization must be responsible for personal information under its control?

What is required for the collection, use, or disclosure of personal information according to Principle 3?

Which principle emphasizes that personal information must be protected by appropriate security relative to the sensitivity of the information?

Which key takeaway is recommended to help identify potentially fraudulent activities?

What must mortgage agents and brokers ensure they verify for each transaction?

How can mortgage professionals reduce the risk of mortgage fraud?

What is used to record the ID presented by each applicant?

"If you suspect fraud, follow the procedures of the brokerage for handling suspicious transactions." This statement relates to which key takeaway?

More Like This

2023 - Protecting Our Business from Financial Crime

Mortgage Fraud Types Quiz

Legal Mortgagee Rights Quiz

Mortgage Licensing and Regulation Overview