Chapter 61: Mortgage Fraud

Cover of Be the Better Broker by Dustan Woodhouse, Mortgage Broker

An excerpt from Volume 2 of Be the Better Broker.

Fraud — just don’t.

Some clients may think that bending the rules to get their home is “no big deal,” when in reality it is your livelihood on the line.

Your licence is worth more than a few thousand dollars, no matter how badly you may think you need that few thousand dollars at the time.

Learn how to say no to clients. No, you cannot help them. Your job is not to be the miracle worker, especially the crooked miracle worker. Your job is to be the expert, the licensed expert with integrity.

Do not bend the rules for friends or family either. They will be just as quick to point the finger at you when pressured and questioned by any form of authority that gives them the impression that retaining their home may be in jeopardy. Also, those will be the files most closely scrutinized during an audit.


When you cross the line, you may think you are doing the client a favor, but that client may well see you as crooked even if he or she derived a benefit. Few among us want to win by cheating.

And how likely is that client to refer a co-conspirator in a fraudulent transaction? Odds are that client is never going to want to see you again — ever. Even if you did get it done, you will leave the client feeling as if he or she was part of something dirty and wrong, and that is fair because fraud is dirty and wrong.

And it is rare.

A 2016 survey of Canadian mortgage brokers and agents asked, “How concerned are you with mortgage fraud in Canada?” Of respondents, 14.3% said they were very concerned and the problem was rampant, and 23.8% indicated they were somewhat concerned, but not a huge problem.

In fact, in the previous year, 54 fraudulent transactions had taken place out of 590,000 total transactions: less than .01% of the total market. Yet 38 percent of Brokers polled were somewhat to very concerned about fraud.

This seems to me to be another instance where we know we are individually behaving properly, yet each of us is convinced that the “others” are up to no good. This is very Canadian — the “I’m OK, but I’m not too sure about the other guy” mindset.


Did you know that the mortgage software used to record an application records every single keystroke in every single application? Are you changing income numbers around? Deleting properties? The history of every version of that application is recorded.

Always assume that every email you type, every conversation you have, is being monitored by the regulator.

Be smart.
Be honest.
Be respected.
Be referred.
Be above reproach.