Centrecourt developments . CMHC Invitational tax Bureau stepped in to verify the borrower’s income. Preventing fraud benefits law-abiding home buyers. Canadian real estate agents have asked Canadian tax authorities to take a “more direct and formal role” to verify the income of mortgage applicants.
It is understood to be part of a two-year plan to tackle mortgage fraud. In Canada, even if the taxpayer agrees, the Canadian Inland Revenue Agency (CRA) will not verify the borrower’s income. But that may change now. “CRA is currently exploring different ways, including providing taxpayer-specific information in a safe manner, participating in verifying the income of mortgage applications, including the feasibility of safely sharing tax information with financial institutions with customer consent,” CRA said in an emailed statement.
The Canadian housing and mortgage company (CMHC) ‘s action plan, obtained by Reuters under the Public Records Act, shows that CMHC is concerned about the “systemic risk” of mortgage fraud and believes that “the current testing tools in the industry have not kept pace with the increasingly complex threats we face.” Documents obtained by Reuters also show that “paperless transactions, pressure to close transactions quickly, rising prices and new regulations create strong incentives for individuals or mortgage professionals to engage in opportunism, or crime-fraud.”
Sherri Nie, a full-time real estate agent in Greater Toronto, said in an interview with our reporter that loan applications, as the last hurdle of real estate brokers’ orders, are indeed steps that often give rise to problems and concerns. I also pay close attention to the recent news. In many cases, the loan has not been approved by the bank, and the offer can be conditionally exempted, allowing buyers to terminate the offer. “this is one of the more issues I need to consider now than in a hot market in the past,” Sherri said. With the advent of stress tests (B20), loans are much more difficult than ever. When I prepare offer for my clients, I usually include the loan as a condition of the buyer in the contract. Unless, my client is really very financially strong, absolutely sure that the handover can be confirmed without contacting the bank in advance, and strongly urge me to remove this clause and increase the chances of successful acceptance of offer.
Before doing so, I must confirm with the client and tell them the risk of doing so, and get their permission to remove the loan condition from the contract. I would like to emphasize that it is the right of every home buyer to ask about the loan. On the other hand, it is also the protection and respect for the seller. Real home buyers, they have made some preparations, loan matters only need the final decision. “
In the current overall slowdown in the market, the volume of housing transactions in the Greater Toronto area is not as active as before, and house prices are leveling off. In such an environment, if the Canadian Inland Revenue does issue a policy later to intervene in the verification of loan applications for home buyers, Sherri believes that the impact on the real estate market may not be too great. “if CRA takes action to crack down on speculators and loan fraudsters, it is a good thing,” she said. But after all, this group of people are a small number of people, and I personally think that it will not have much impact on the real estate market in most areas. “
