Mortgage fraud in Canada has surged dramatically in recent years, creating deep concerns across the mortgage, real estate, and financial sectors. With rising interest rates, tighter lending requirements, and ongoing affordability challenges, both individual borrowers and organized crime groups are exploiting the cracks in the system. For mortgage lenders, brokers, and investors, the implications are serious.
At Lendworth, we believe in protecting the integrity of Ontario’s real estate markets while providing equity-based lending solutions that prioritize transparency, compliance, and financial security.
What Is Mortgage Fraud — and Why Is It Growing?
Mortgage fraud occurs when someone deliberately provides false information during the mortgage process to obtain financing they wouldn’t otherwise qualify for. In Canada, it typically appears in three forms:
- Mortgage Fraud for Shelter – Homebuyers inflate income or misrepresent their employment to qualify.
- Mortgage Fraud for Profit – Real estate professionals or insiders falsify information for personal gain.
- Mortgage Fraud for Money Laundering – Criminals use mortgages to integrate illicit funds into the legal economy.
What’s driving the rise?
- Housing affordability crisis
- Post-pandemic financial strain
- High interest rates and tighter mortgage rules
- Gaps in regulatory oversight and enforcement
Recent data from the Canadian Anti-Fraud Centre reports over $638 million in fraud losses in 2024, with true losses estimated to be in the billions when factoring in unreported cases. This is no longer a niche issue — it’s a systemic risk.
How Mortgage Fraud Impacts Canada’s Housing Market
Fraudulent mortgage activity inflates home prices, misleads investors, distorts property values, and undermines trust in the financial system. More concerning, when criminal organizations use mortgage lending to launder money, they not only disrupt real estate markets — they also create national security risks.
In cities like Toronto, Vancouver, and Montreal, mortgage fraud has also been linked to limited housing supply, as criminally acquired homes sit idle or are used to obscure illegal transactions.
The Role of Lendworth: Responsible Lending, Real Solutions
At Lendworth, we understand that borrowers today face greater challenges than ever before — and we also know that lenders must be part of the solution.
That’s why we offer:
✅ Equity-based private mortgage lending – approvals based on the value of your property, not income statements
✅ Thorough risk and fraud assessment on every file
✅ Fast funding with full transparency
✅ Licensed and regulated by FSRA as both a mortgage administrator and brokerage
We proudly support a safe, reliable lending environment — offering first mortgages, second mortgages, HELOCs, construction loans, and bridge financing throughout Ontario.
How Canada Can Better Combat Mortgage Fraud
While new legislation is in place to make mortgage administrators, brokers, and real estate professionals subject to anti-money laundering laws, more work is needed. Canada must:
- Improve FinTRAC reporting clarity for fraud-related transactions
- Enhance KYC (Know Your Client) verification tools
- Fund and empower a national financial crime enforcement agency
- Foster public-private collaboration between lenders, law enforcement, and regulators
What Borrowers Should Know
Whether you're buying your first home or refinancing an existing property, mortgage fraud puts you at risk — even unintentionally. Always provide accurate financial information, work with licensed professionals, and ask questions about your mortgage documents.
And if traditional banks say no, but your home has equity? Lendworth may be able to help — without shortcuts or shady practices.
Partner with a lender you can trust.
📍 Serving Toronto, Vaughan, and all of Ontario
📞 905-597-1225