Posted on: 05-05-10 16:29:44
1.CMHC is not revealing the number of 40 year old mortgages and the default from them to external agencies.
2.BMO alleges huge mortgage fraud.
http://www.cbc.ca/canada/calgary/story/2010/05/04/mortgage-fraud-bank.html
Bank of Montreal alleges huge mortgage fraud
Last Updated: Tuesday, May 4, 2010 | 9:04 PM MT Comments702Recommend621.
By Charles Rusnell, CBC News
The Bank of Montreal is suing hundreds of people in Alberta, including lawyers, mortgage brokers and four of its own employees, in what is one of the largest alleged cases of mortgage fraud in Canadian history.
Legal documents obtained exclusively by CBC News allege the bank was the target of a sophisticated fraud operated by 14 inter-connected groups. The documents allege the scheme generated at least $140 million, about $70 million of which was for phoney mortgages.
The bank has estimated it may lose as much as $30 million.
Toronto forensic accountant Al Rosen said he has never seen anything like it.
\"This is massive in the sense that it is so broad and so deep,\" Rosen said Tuesday. \"This is [allegedly] a huge fraud. I can't think of any situation that has so many people involved and over a period of time like this one.\"
Problems detected in 2006
The bank said it first detected the alleged scam in 2006 when its security department noticed \"irregularities\" in a number of mortgages in Western Canada. Officials immediately hired a forensic accounting firm, which spent nearly a year unravelling what the bank calls a sophisticated scheme.
Legal documents allege millions of dollars have been transferred to such countries as Lebanon, India, Saudi Arabia, the United Arab Emirates and Pakistan. (CBC)
The bank's investigators say the scam's ringleaders would identify the worst house in a good neighbourhood. They would buy at an affordable, fair-market value price, but convince the bank it was worth much more because of the neighbourhood it was in.
The bank, which relies on a software program to determine house prices by neighbourhood, claims it would end up providing a grossly inflated mortgage, and the ringleaders would pocket the difference.
To carry out the alleged scheme, the bank claims masterminds would recruit what's known in fraud parlance as a \"straw buyer.\" For a payment of $2,000 to $8,000, these straw buyers, mostly new immigrants, would allow their name to be used to obtain the mortgage on the house.
According to the court documents, the ringleaders allegedly created fake, inflated wage and net income documents for the straw buyers to make them appear richer than they were.
Lawyers, who are alleged to have been in on the scheme, would then produce the necessary legal documents for the house sale. Seventeen lawyers have been named in the bank's lawsuit.
House nets $180,000
In one case, a house in the Bearspaw district of Calgary was bought for nearly $900,000 and in three years, its value was inflated to $2.3 million, a profit of $1.4 million for the alleged fraudsters. An Edmonton house is alleged to have netted the scheme nearly $180,000.
During its investigation, bank investigators seized records that showed millions of dollars from the alleged scheme have been transferred to such countries as Lebanon, India, Saudi Arabia, the United Arab Emirates and Pakistan.
The Bank of Montreal said it conducted the investigation and filed the lawsuit for two reasons.
\"One was to recover as much as possible of what was taken from the bank from the fraud,\" Ralph Marranca, the bank's spokesman, told the CBC on Tuesday.
\"And secondly was to send a very strong message to fraudsters and anyone who might contemplate something like this that the bank will pursue this very aggressively and will not tolerate fraud.\"
Other banks don't appear to be as aggressive in their approach, even though documents indicate they may have been targeted too. Bank of Montreal investigators found documents that showed one Calgary management company had 150 suspect mortgages from 16 different financial institutions.
Rosen said this alleged fraud illustrates how weak and ineffective the controls are in our banking system.
\"To me the most exasperating part of our business is we are not doing what we are supposed to be doing,\" he said. \"We are kidding ourselves that we have good systems, because we don't.\"
Read more: http://www.cbc.ca/canada/calgary/story/2010/05/04/mortgage-fraud-bank.html#ixzz0n5ZpW9gS
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Sunny Leone a true Canadian DESI now back in India !.
We heard that kind of fraud happens only in USA. We have good system and our mortgage standards are really good and top of that our RE professionals follow strict guidelines. Banks and responsible buyers are not crazy like US.
I heard from many realtors that if Realtors can not help client to make a mortgage then he/she can not get a client. How much are you creative for making mortgage approval that makes u more successful Realtor.
Why bank care… when tax payers are signing with buyers.
There are few bank employees who bring 30-50 mortgage/months and banks know how they make it but greed covers the facts.
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This news is just a tip on iceberg and pretty much all the banks are involved in this kind of practices. This will be bigger fraud in ON and BC if there is federal investigation. At least it’s not news within Indian community.
Quote:
Originally posted by Vandematram
1.CMHC is not revealing the number of 40 year old mortgages and the default from them to external agencies.
2.BMO alleges huge mortgage fraud.
http://www.cbc.ca/canada/calgary/story/2010/05/04/mortgage-fraud-bank.html
Bank of Montreal alleges huge mortgage fraud
Last Updated: Tuesday, May 4, 2010 | 9:04 PM MT Comments702Recommend621.
By Charles Rusnell, CBC News
The Bank of Montreal is suing hundreds of people in Alberta, including lawyers, mortgage brokers and four of its own employees, in what is one of the largest alleged cases of mortgage fraud in Canadian history.
Legal documents obtained exclusively by CBC News allege the bank was the target of a sophisticated fraud operated by 14 inter-connected groups. The documents allege the scheme generated at least $140 million, about $70 million of which was for phoney mortgages.
The bank has estimated it may lose as much as $30 million.
Toronto forensic accountant Al Rosen said he has never seen anything like it.
\"This is massive in the sense that it is so broad and so deep,\" Rosen said Tuesday. \"This is [allegedly] a huge fraud. I can't think of any situation that has so many people involved and over a period of time like this one.\"
Problems detected in 2006
The bank said it first detected the alleged scam in 2006 when its security department noticed \"irregularities\" in a number of mortgages in Western Canada. Officials immediately hired a forensic accounting firm, which spent nearly a year unravelling what the bank calls a sophisticated scheme.
Legal documents allege millions of dollars have been transferred to such countries as Lebanon, India, Saudi Arabia, the United Arab Emirates and Pakistan. (CBC)
The bank's investigators say the scam's ringleaders would identify the worst house in a good neighbourhood. They would buy at an affordable, fair-market value price, but convince the bank it was worth much more because of the neighbourhood it was in.
The bank, which relies on a software program to determine house prices by neighbourhood, claims it would end up providing a grossly inflated mortgage, and the ringleaders would pocket the difference.
To carry out the alleged scheme, the bank claims masterminds would recruit what's known in fraud parlance as a \"straw buyer.\" For a payment of $2,000 to $8,000, these straw buyers, mostly new immigrants, would allow their name to be used to obtain the mortgage on the house.
According to the court documents, the ringleaders allegedly created fake, inflated wage and net income documents for the straw buyers to make them appear richer than they were.
Lawyers, who are alleged to have been in on the scheme, would then produce the necessary legal documents for the house sale. Seventeen lawyers have been named in the bank's lawsuit.
House nets $180,000
In one case, a house in the Bearspaw district of Calgary was bought for nearly $900,000 and in three years, its value was inflated to $2.3 million, a profit of $1.4 million for the alleged fraudsters. An Edmonton house is alleged to have netted the scheme nearly $180,000.
During its investigation, bank investigators seized records that showed millions of dollars from the alleged scheme have been transferred to such countries as Lebanon, India, Saudi Arabia, the United Arab Emirates and Pakistan.
The Bank of Montreal said it conducted the investigation and filed the lawsuit for two reasons.
\"One was to recover as much as possible of what was taken from the bank from the fraud,\" Ralph Marranca, the bank's spokesman, told the CBC on Tuesday.
\"And secondly was to send a very strong message to fraudsters and anyone who might contemplate something like this that the bank will pursue this very aggressively and will not tolerate fraud.\"
Other banks don't appear to be as aggressive in their approach, even though documents indicate they may have been targeted too. Bank of Montreal investigators found documents that showed one Calgary management company had 150 suspect mortgages from 16 different financial institutions.
Rosen said this alleged fraud illustrates how weak and ineffective the controls are in our banking system.
\"To me the most exasperating part of our business is we are not doing what we are supposed to be doing,\" he said. \"We are kidding ourselves that we have good systems, because we don't.\"
Read more: http://www.cbc.ca/canada/calgary/story/2010/05/04/mortgage-fraud-bank.html#ixzz0n5ZpW9gS
VM, I do not agree with the heading that you have given. Money went to Saudi, Libiya and Pakistan and India. One can easily guess who are responsible. I do not agree that "many Desis" are involved.
Check out this link
http://www.cbc.ca/canada/calgary/story/2010/05/05/mortgage-bank-shory.html
Calgary Conservative MP Devinder Shory is allegedly involved in this scam.
At risk of sound racist/politically incorrect, I hope that the change in Canadian demographics does not lead into rise of this kind of frauds.
I would be worried about the Saudi - Pak links.
http://documentcentre.eycan.com/eycm_library/BMO
http://documentcentre.eycan.com/eycm_library/BMO%20v.%20Cochrane/English/Court%20Orders/Amended%20Statement%20of%20Claim,%20dated%20April%2014,%202010.pdf
://documentcentre.eycan.com/eycm_library/BMO
Here is the document link. You can see the names of all the people (A long list of desi too).
Quote:
Originally posted by Nightmare
VM, I do not agree with the heading that you have given. Money went to Saudi, Libiya and Pakistan and India. One can easily guess who are responsible. I do not agree that "many Desis" are involved.
I saw this initial report on CBC TV and they had flashed a long list of Desi names. I did not have time to find that link and attach it to the post.
Thanks Meghal and RS for posting the link here and validating my title.
Incidentally Uncle Harper is getting into trouble by poor Desi's. First by Jaffar and now by this Shorey guy.
Jai HO.
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Sunny Leone a true Canadian DESI now back in India !.
Quote:
Originally posted by Vandematram
I saw this initial report on CBC TV and they had flashed a long list of Desi names. I did not have time to find that link and attach it to the post.
Thanks Meghal and RS for posting the link here and validating my title.
Incidentally Uncle Harper is getting into trouble by poor Desi's. First by Jaffar and now by this Shorey guy.
Jai HO.
The links do not work. Further, can Jaffer be called "Desi"? He was born in Africa and has probably never visited India.
Presuming that list of names contain "Desi", my guess is that they may be all "Straw buyers" , the poor guys who migrated to Canada with big dreams and then fell for the scam for a few thousand dollars. My understanding is that there was only one group involved which floated differen companies/ entities and perpetrated the scam.
With laws and its poor implementation in Canada, I bet that the main perpetrator will escape with slap on the wrist.
