Mortgage fraud is not only a problem for banks. Borrowers can be pulled into it, held responsible for it, or have their own home used in it. Here is what the main schemes look like, the red flags worth stopping for, and what to do if something seems wrong.
The main types of mortgage and real estate fraud
The Financial Consumer Agency of Canada (FCAC) and New Brunswick's Financial and Consumer Services Commission describe several patterns:
- Application fraud. False information on a mortgage application, such as inflated income or a made-up job. FCAC notes that someone else may falsify documents or pressure a borrower to do it, and the borrower can still be held responsible.
- Straw buyers. Someone is paid to apply for a mortgage on another person's behalf. The person who signs becomes legally responsible for the payments.
- Title fraud. Usually starting with identity theft, a fraudster takes over the title to a home, then sells it or borrows against it.
- Foreclosure rescue scams. A person behind on payments is offered help in exchange for the title or a fee, and the "helper" keeps the money or refinances the home.
- Fraud for profit. Deceiving a lender by inflating a property's value.
Red flags to watch for
These warning signs are drawn from the schemes above. Any one of them is a reason to pause and get independent advice.
- Someone offers to "fix" your application. A suggestion to round up income, add a job, or use a borrowed down payment that will be "paid back after closing."
- You are asked to sign blank or incomplete documents, or to sign without time to read them.
- An offer to make "easy money" in real estate, especially being paid to put a mortgage in your name for someone else.
- Pressure to skip your own lawyer or notary, or to use one chosen by the other side.
- A rescue offer that asks for your title. No legitimate payment plan requires transferring ownership of your home.
- An appraisal or price that seems disconnected from the neighbourhood.
- Unexpected mail about a mortgage, tax bill or account you did not open, which can signal identity theft.
- A professional who cannot show a provincial licence or registration.
How to protect yourself
FCAC recommends dealing with licensed or accredited mortgage and real estate professionals, reading every document fully before signing, keeping mortgage information secure and shredding old documents, and researching anyone offering a loan. It also suggests running a land title search through the provincial or territorial land registry, which shows the owner and any registered mortgages or liens, and considering title insurance to protect against losses from title fraud. If payments are becoming difficult, contact the lender first rather than responding to an unsolicited rescue offer.
Checking a licence takes a few minutes. The licence-check page links to provincial registers, and the guide on how to check a mortgage broker's licence explains what to look for.
If you think you are a victim
FCAC suggests these steps:
- Write down when you noticed the problem, what you did, and the names and dates of everyone you contacted.
- Contact your financial institutions and any other companies where accounts may be affected.
- File a police report and contact your land registry office.
- Ask both TransUnion and Equifax to place a fraud alert on your credit report.
- Report it through the National Fraud Reporting System run by the RCMP and the Canadian Anti-Fraud Centre.
If a licensed professional was involved, also contact the provincial regulator.
Next step
Before sharing documents or signing anything, confirm who you are dealing with. A licensed mortgage broker should be able to explain every number on your application, and you should be comfortable with all of it being accurate.
Sources
- Financial Consumer Agency of Canada, Real estate fraud, 2025-12-01. Accessed 2026-11-02.
- Financial and Consumer Services Commission (New Brunswick), Blueprint to Protect Yourself Against Mortgage Fraud, 2019-07-17. Accessed 2026-11-02.
General information only, not legal advice. If you suspect fraud, contact police, your lender and your provincial regulator. Mortgage Directory does not verify or endorse listed professionals.
