Toronto Mortgage Fraud Lawyers and Related Real Estate Offences
If you are on the wrong end of a charge of Mortgage Fraud in Toronto under the Criminal Code of Canada and the subject matter of the alleged offense involves a mortgage or real estate transaction, then it is imperative that you have a complete understanding of the essence of these crimes and how they are viewed by the Justice system.
Essentially, mortgage fraud can be committed when a person or corporation knowingly provides inaccurate, false, misleading or incomplete information to a lender in order to obtain a mortgage and the funds derived from it that they might not otherwise be entitled to. This could include anything from a person or corporation claiming to having a higher income or credit position than they actually have, to making available falsified proof of identification or a falsified (usually inflated) appraisal of the property at the heart of the transaction.
In the above paragraph, some of the mechanisms of real estate fraud are self-evident, but it is helpful to point out that in the case of falsified identification, the investor solicits the help of a “man of straw” – essentially an individual with substantially higher income or credit than the borrower, who provides his or her documentation to the lender, accepts title and immediately thereafter, executes a quit claim deed relinquishing all title in the real estate to the intended beneficiary of the alleged scheme.
The investor does not make any mortgage payments and perhaps, rents the real property until the lender initiates foreclosure or other collection procedures many months later. Both the applicant and the investor may then be considered parties to the offense of fraud.
Basically, there are two general categories of Mortgage Fraud: Fraud for Housing and Fraud for Profit.
FRAUD FOR HOUSING
In this category, a borrower may allegedly supply false or minimally inaccurate information about his or her qualification for the funds being advanced by the lender, usually a financial institution such as a bank or perhaps a private mortgage lender who may or may not be incorporated. This false information may consist of something as seemingly innocent as exaggerating their income or the nature of their employment and is usually done in order to qualify for the loan or to obtain more favourable repayments terms that will apply to the home they are purchasing.
FRAUD FOR PROFIT
This category of alleged mortgage fraud is occasionally described as “industry insider fraud” because it usually involves the cooperation, if not the active participation of a real estate broker, mortgage broker, appraiser or other real estate professional.
Such potentially illegal activity does not always involve active participation on the part of the real estate professional, either a mortgage broker or a sales agent. The so-called badge of fraud can be inferred (although not necessarily able to be proven beyond a reasonable doubt) by the professional’s failure to disclose or correct a material representation made by someone else which she or he knows to be false.
LEGAL ELEMENTS of MORTGAGE or REAL ESTATE FRAUD
As is suggested above, in any case of fraud, the representation, misrepresentation or factual omission must be material, that is to say, by law, this item must be something that the lender could potentially act upon to his detriment and reasonably effect his decision to make the loan in question.
In addition, before a court may render a verdict of guilty in relation to a fraud allegation of any kind under the Criminal Code of Canada, the Prosecution must advance evidence to support a finding of proof beyond a reasonable doubt that the accused person actually intended to make this misrepresentation, essentially knowing or in circumstances where he ought to have known, that the lender (in this case a financial institution or individual) would act upon it to it’s detriment, namely by advancing the mortgage funds under circumstances where it would be unlikely for them to do so, but for this representation.
The Criminal Law Team of Bruce Karten & Stephen Hebscher understand the need for an experienced legal defence when facing charges of mortgage fraud or real estate fraud. Be proactive, and call us now to discuss your case: Your best defence is a strong offence. See what our other clients are saying about us. We can help you too!
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