With interest rates climbing, getting approved for a mortgage is tougher than ever for buyers. But that hasn’t stopped some real estate agents from pushing sales anyway. An undercover probe by CBC Marketplace uncovered networks of realtors, mortgage brokers, and bank staff who help create fake mortgage applications-for a fee.
Hidden cameras caught them offering to hook buyers up with forged paperwork showing made-up jobs, salaries, and tax records so they can get loans they wouldn’t normally qualify for.
Got questions or want to share something about mortgage fraud? Email: ask@cbc. ca
This is big money. Real estate agents say these groups charge about one per cent of the loan amount just for creating the fake application. That’s on top of the usual commissions once the sale goes through.
On a home priced at $640,479 – which is around Canada’s average – an agent typically earns between $16,000 and $32,000 in commission. Meanwhile, a mortgage broker could pull in over $2,550 from lenders.
While some people knowingly take part in this fraud, Marketplace found out that some agents also exploit buyers who don’t realize what’s going on. Newcomers to Canada are especially vulnerable since they might not know how buying a house works here yet. Plus, new Canadians usually don’t have enough Canadian credit history or work records to get approved by major banks right away.
Legal and financial crime experts say what Marketplace uncovered breaks Ontario laws like the Real Estate and Business Brokers Act and the Mortgage Brokerages, Lenders and Administrators Act. Faking a mortgage application also violates Canada’s Criminal Code.
What this means for buyers and the housing market
This scam doesn’t just hurt individual buyers; it affects everyone in Canada, says Dan Eisner, CEO of True North Mortgage.
“As interest rates go up and house prices drop, these buyers probably won’t keep up with payments which can cause more panic selling,” he explained.
Eisner says his company has spotted lots of fraudulent applications along with fake tax forms like T4s and bogus job letters listing companies that seem real but aren’t.
With home prices falling further now, those who got mortgages this way face even bigger risks.
“If someone got their mortgage fraudulently thinking they could always sell if things got tough-that plan isn’t working anymore. It also keeps honest folks from competing fairly in the market,” Eisner added.
The Real Estate Council of Ontario (RECO) declined an on-camera interview about these findings.
In a statement RECO’s registrar Joseph Richer said: “Agents should expect to be prosecuted if they engage in mortgage fraud.”
If real estate agents falsify mortgage info or help others do it they risk fines up to $50K, jail time up to two years or losing their licence altogether.
RECO reports disciplining seven agents or brokers over five years plus charging several others under provincial law.
“Agents who break rules and betray public trust need to be kicked out,” said Tim Hudak from the Ontario Real Estate Association responding to Marketplace’s report Friday.
“RECO needs stronger powers-to investigate better, hand out bigger fines and suspend licenses when needed.”>>>>>>>>
Carl Davies at Equifax Canada says mortgage fraud is on the rise-they flag 15K-24K suspicious loan apps monthly for lenders nationwide.>
“Sixty-seven per cent of flagged cases involve false info,” Davies explained. “It’s by far our biggest sign something fishy is going on today.”
Marketplace staff pose as first-time homebuyers
To see where this all begins, two Marketplace workers went undercover pretending to be new Canadians buying their first house-with hidden cameras rolling.
The pair checked out 10 homes listed by agencies previously linked with possible fraud signs.
The undercover couple told each agent they’d saved enough for 20% down but weren’t sure if one partner’s cash income-never declared officially-would let them get a bank loan (it wouldn’t).
The agents quickly saw these clients wouldn’t qualify through normal channels-but six out of ten still offered ways around that by arranging fake documents or connecting them with brokers willing to submit fraudulent applications behind the scenes.
WATCH | Real estate agents caught pushing mortgage fraud on camera:
Real estate agents caught pushing mortgage fraud on cameraSix out of ten realtors offered illegal help so buyers could pretend they qualified for mortgages according to CBC Marketplace Investigation. David Common reports for The National.
“Income is not an issue,” said one agent showing off paperwork he’d prepared before. “This is what we turn into their income. Even if you make zero dollars or you’re just staying at home we can make it look like you earn something. The only thing we cannot fake is your credit score.”
“You know by official rules you won’t qualify,” another agent said explaining how his contacts could “fix” things quietly. “They’ll make docs saying you’re making more money than reality-but no one can openly admit it because it’s false.”
“They’ll create T4 slips or show her as an employee somewhere else using any company’s name but theirs,” said another one proudly described how they’d do it. Three out of those six were working at Home Life Miracle Realty Ltd., which runs five offices across Toronto area plus one in Cambridge Ontario. Marketplace also talked with several buyers claiming those same brokerage’s reps pushed them toward shady loans-or filed false papers without telling them. When asked about these hidden camera recordings most didn’t reply or claimed they simply refer clients elsewhere since mortgages aren’t handled directly by agents. Ajay Shah leads Home Life Miracle Realty Ltd.; he told Marketplace he doesn’t support what was shown on video though claims those three reps are only a small piece among roughly 3K salespeople under him.The brokerage Home Life Miracle Realty Ltd., operates multiple branches near Toronto area plus Cambridge Ont., where three connected reps were filmed agreeing to arrange fraudulent mortgages for fees.(CBC)If proof appeared confirming wrongdoing Shah promised action but chose not to do an interview nor watch footage himself. “At best I can fire them but I’m not allowed remove licences-that’s RECO’s role,” he said.
An expert says industry oversight must improve
Forensic accountant Jennifer Fiddian-Green believes this shows regulators need stronger controls everywhere. “We gotta have watchdogs checking practices regularly,” she said bluntly. “We need frontline folks alert enough so problems don’t fly under radar.” Mortgage broker Sanjeet Mand agrees lax enforcement lets such crimes grow rampant across both sectors. “I think it’s toxic,” Mand stated plainly. “People like that gotta be booted from business.”Sanjeet Mand works as a Brampton-based broker worried about widespread loan scams-and calls for harsher crackdowns.(CBC)Mand says some realtors steer him away because he won’t provide phony docs-which hurts his reputation badly. “Whenever you mention faking anything it’s like ‘Can you cook me some papers?’ That kills our credibility.” Marketplace cold-called 25 different brokers across hot markets including Vancouver metro area, Calgary, Edmonton, Toronto region and Montreal-to see if anyone would supply fake docs without realtor referrals. Most refused outright; but roughly one in five admitted willingness. “My team charges $3K upfront plus 1% cut from total loan,” admitted one broker ready to bend rules. In Ontario FSRA oversees discipline against brokers; officials confirmed such behaviour violates Mortgage Brokerages Act banning any help toward dishonesty or illegal acts: “A broker shouldn’t act when there are clear signs they’re used by borrowers/lenders/investors involved in deceitful conduct.”
Mistakes slip through even big banks’ systems
Marketplace found evidence forged job details backing loans sometimes get approved inside major Canadian banks too. “You’ll get prime rate straight from bank,” claimed an agent asked where faked mortgages come from exactly. “There are few insiders-my own guys-doing this repeatedly; hooked up deep inside banks helping evade underwriters.” Fiddian-Green argues banks must wake up & beef up checks: “Just verifying employer details takes minutes – call ’em up google ’em find red flags.” Eisner noted True North calls every employer listed; many other lenders skip that step: “They accept some level of fraud assuming loss will balance out.”
‘Nowhere safe’ – Buyers feel trapped
This scam rarely hurts culprits directly but hits innocent hopeful homeowners hard too. Chris & Bibi Harding moved here from Guyana in 2021 shocked when Scotiabank worker submitted phony loan app using their names without consent. “All our data was changed,” Bibi recalled after visiting branch giving SIN number only to find bogus employment info linked instead permanently attached online profiles showed Chris as flooring operations manager while Bibi worked at tax firm-both totally untrue-they had never held those jobs here.“Chris & Bibi Harding filed complaint against suspicious property deal April 2022; still waiting update months later.(CBC)Looking back Hardings think bank adviser acted under instructions from realtor involved: “She told us she got my contact via [agent] promising Scotia loan approval,” Chris said quietly Scotiabank employee demanded $5K upfront supposedly covering profile setup fees-the Hardings paid believing fee was legit. After catching deceit & filing complaint bank told couple close accounts immediately leaving them feeling helpless:“I thought ‘We came here hoping life’d improve yet folks prey on newcomers nobody stands beside us saying ‘Hey no that’s wrong.’’” Scotiabank later refunded $5K reinstated accounts & confirmed employee responsible left firm. Fiddian-Green stresses banks must join fight against loan scams: “We gotta collaborate closely sharing info fast stopping schemes early before damage spreads.”
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