On The Shit List

After a very extensive and exhaustive search, and many hours of research, I have compiled a list below of all the people that have gone to jail for committing mortgage fraud.

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10.

There it is. There is the top 10 for ya. This week has been a shit show for anyone in the real estate game, and I really wonder if this week will really start to chip away at the credibility of our industry, and the value we bring to Canadians.

Earlier this week the British Columbia Financial Services Authority ( BCFSA ) released the results of years of investigations with follow ups and charges ( not criminal of course ) on a lot of people. The full story has been covered in many trade industry publications, and most major newspapers, so I won’t re hash the details here.

The fact that so many people, got away with so much fraud, for so many years is absolutely unacceptable to me, and I really hope it is to you as well. For damn near a decade this type of shit has been going on, and time and time again, there seems to be nothing more than a fine ( that always seems to be about 10% of the total amount they made off of the fraud in the first place ) and a lifetime ban from the industry. Now, most of the time, the people banned from the industry simply start practicing again without a license. They pay their fines, and start right back up again. Then they get caught – again, and are once again banned. It is beyond ridiculous.

Every single time one of these assholes is caught it leaves a very bad stain on our business. It usually involves a real estate agent or 2, a crooked appraiser, and 9 times out of 10 a bad lawyer – just to add the cherry to the top of the shit sundae. The frauds they commit cause so much damage to our reputation, our housing market and our banking sector. For every fraud there are willing accomplices that help move the fraud along. It is far more than simple documentation forgery, and usually is a complex web of lies, deception, and fraud. It pulls in players from all over the financial system. The bank who funds the deal is at risk of losing a lot of money that it never should have lent in the first place, and somehow we all get painted with the same bad brush.

As we approach a Federal election, I really hope to see our trade associations lobby like hell to get a new government – whichever colour they may be – to actually do something to put a stop to the fuckery. The only real consequences for the bullshit seem to be when the CRA goes after the fraudsters for failing to pay income tax on all of their ill gotten fees. Seriously? The fucking taxman has more bite than the criminal justice system? Where did we go wrong here? There have been some loud voices calling for things like CRA linkage to lenders to help root out fraud, but here we are almost a full year after it was actually in the Parliament being talked about, and we got sweet fuck all. It took about a decade to even get it into politicians view, and it will be at least another year before legislation is re proposed, and then, knowing how long the government takes to do anything, it will probably takes another 3 years to actually get the system in place and running.

Fraud – whether income fraud, a white lie here or there, misrepresenting the purpose of the property ( Owner occupied vs. rental ), etc. etc. have beyond ruined Canadian housing. There is no chance in hell a young kid today can buy a house in the country. Did zero interest rate policy ( ZIRP ) and quantitative easing ( QE ) contribute to this? Sure. But fraud has contributed to the overall growth of prices – especially in BC and Ontario that it cannot be ignored.

When you have banks like TD being bitch slapped on what seems like a quarterly basis for helping to further money laundering, and fraudsters getting mortgages for people that have no business getting approved – is it any wonder the price of real estate is sky high? I know a lot of great brokers that I have met over the years, and I also have met quite a few that should be locked in a cell. The problem is that our industry always seems to celebrate the wrong kind. The brokers committing fraud always seem to rack up the volume – gee whiz I wonder why? Racking up the volume always gets you an industry award. Not only does the industry as a whole look bad when a broker gets named publicly, but when it comes out down the road that our trade associations were giving them awards at fancy gala parties, it makes us all look even worse – its almost like we were complicit in the damn thing. Come on, we all know a new broker comes on to the scene and racks up brokerage leading volume is probably got a case of fraud or two. I remember being at a brokerage years ago where a new guy came along, and all of a sudden shot to the top of the leaders board every month. Of course, it came out last year that FSRA has been investigating him for years, and finally pulled his license. We all knew.

I have seen examples where a broker gets booted from the industry for life, only to reapply, and switch his first name to his last name, and his last name to his first name and get a license. How in the actual fuck? Regulators seem to be putting a heavy burden on our industry to verify identity, help root out money laundering, political exposures and the like, but they can’t even verify if someone simply moved their name around to get back in? Why the hell are we paying these regulators if they cannot even do the very basics of guarding the gate?

I really hope to see our industry step up internal policing, and really take a stand against the bullshit. Everyone knows Brampton is the epi center of fraud in Canada, but no one can say it. Why the hell not? I just did, and I didn’t burst into flames. Why can’t we simply call it like it is? What are we afraid of? Are we afraid we are gonna hurt someone’s feelings? Okay, well if that is what it takes, then count me in. I would rather offend someone than have to explain to my kids and grandkids why they can’t afford to buy a basic house, and raise a family. When my kids and grandkids ask me why the housing market got ruined, I sure as hell am not comfortable telling them, ” Well you see, we were all too scared to tell the truth, so we fucked over your entire generation and allowed things to become unaffordable”.

Now, I am gonna get a lot of hate mail on this last little bit, and believe me 100% when I say, I really don’t give a shit. I speak in facts and numbers, not bullshit and wokeness. I was speaking to a very good colleague of mine today who happens to work in the risk department for a very large lender, and we were discussing where all the fraud comes from. And yes, It is Peel Region in Ontario. In fact, even though peel Region has about 1.5M population, compared to Ontario’s 14.2 million ( about 10.5% ), it somehow represents 82% of mortgage fraud. So, 82% of the fraud in Ontario is committed by 10% of the people. The numbers in BC are equally depressing, with Victoria and Vancouver punching way above their weight class. Shocking. It shouldn’t be this way, and it doesn’t have to be this way.

I really hope we can start to see this shit for what it is, and work to root out the fraud, the fraudsters, and the corruption our industry faces. Every single time there is another round of mortgage brokers and realtors served up in the media, we all suffer. Trust is the only thing that most of our businesses, and the entire economy for that matter, run on. We need our clients to trust us, and to truly think we are putting their best interest forward. We need the general public to look at our industry with a favourable lens, and not think back to stories like this week when they think of us.

I would anticipate we are going to see a lot more of brokers being paraded inf front of the media in the doming months. Frauds – like Bernie Madoff, usually take a couple years to actually come out after the economy turns South. We are right in the zone now for a bunch of bad stuff to come public. Maybe it is outright fraud, maybe is was people being led astray, maybe it is simply bad brokers telling lies to people to get a deal done. It doesn’t matter, the PR for our industry isn’t going to be the best over the coming months.

I really hope that our trade associations can work hard to help be a positive step in the right direction for our industry. God knows we are gonna need all the help we can get to help restore our standing in society.