Types of Mortgage Fraud in Ontario
Mortgage fraud in Ontario takes several forms, and both buyers and existing homeowners can be victims. Application fraud involves misrepresenting income, employment, or the intended use of a property to qualify for a mortgage. Title fraud occurs when someone fraudulently transfers ownership of your property — often while you're away — and takes out a mortgage against it. Value fraud involves inflating a property's appraisal to secure a larger mortgage than the property warrants. Identity theft can be used to apply for mortgages in your name without your knowledge. Ontario, particularly the GTA, has seen increases in all types of mortgage fraud, making awareness and prevention essential.
Red Flags When Getting a Mortgage
Be alert to these warning signs during the mortgage process: anyone who suggests inflating your income or misrepresenting your employment on a mortgage application (this is a criminal offense), requests to sign documents you haven't read or don't understand, pressure to use a specific appraiser or lawyer chosen by the seller, unusually high property prices compared to recent comparable sales in the neighbourhood, and requests to act as a nominee buyer for someone else. Legitimate mortgage professionals — brokers, lenders, and lawyers — will never ask you to misrepresent information on your application. If something feels wrong, trust your instincts and get a second opinion.
Protecting Your Home From Title Fraud
Title fraud is one of the most devastating forms of fraud because victims can lose their homes. To protect yourself: purchase title insurance when you buy (it costs $300–$500 and provides ongoing protection), monitor your mail for unexpected mortgage or legal correspondence, check your credit report regularly for unauthorized inquiries or accounts, and consider registering for Ontario's Land Registry Notification service, which alerts you to any changes registered against your property title. If you'll be away from your property for an extended period, have someone collect your mail and watch your home. Title fraud often targets properties that appear vacant or whose owners are elderly, absent, or deceased.
How to Verify Your Mortgage Professional
Every mortgage broker and agent in Ontario must be licensed by the Financial Services Regulatory Authority of Ontario (FSRA). You can verify any professional's license status on FSRA's public register at fsrao.ca. Check that their license is active, their brokerage is in good standing, and there are no disciplinary actions on their record. Be cautious of anyone who claims they can get you approved when no one else can — while some brokers do specialize in complex cases, miraculous promises should be scrutinized. Ask for references, check online reviews, and never work with someone who asks you to pay fees upfront before any service is provided.
What to Do If You Suspect Fraud
If you suspect you're a victim of mortgage fraud or are being asked to participate in a fraudulent scheme, take immediate action. Contact your lender to freeze any suspicious activity. Report the fraud to your local police and to the Canadian Anti-Fraud Centre (1-888-495-8501). If you suspect title fraud, contact your title insurer immediately and file a complaint with the Law Society of Ontario if a lawyer is involved. For mortgage application fraud, you can also report to FSRA, which investigates and disciplines licensed mortgage professionals. Document everything — save emails, texts, and documents related to the suspicious activity. Acting quickly is critical to minimizing damage and recovering from fraud.
Frequently Asked Questions
What is title insurance and do I need it in Ontario?
Title insurance protects you against losses from title defects, fraud, and certain survey issues. It costs $300–$500 as a one-time premium and provides ongoing protection for as long as you own the property. While not legally required, it's strongly recommended by most lenders and lawyers in Ontario.
How can I check if my mortgage broker is legitimate in Ontario?
Verify their license on FSRA's (Financial Services Regulatory Authority of Ontario) public register at fsrao.ca. All mortgage brokers and agents must hold an active license. Check for any disciplinary actions or complaints, and confirm their brokerage is in good standing.
What should I do if someone has taken out a mortgage on my property without my knowledge?
Contact your title insurer immediately, report the fraud to local police and the Canadian Anti-Fraud Centre, and consult a real estate lawyer. Title insurance will typically cover your losses. Acting quickly is essential — the sooner you report, the easier it is to resolve.
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