CMHC Looking for Solution to Stop Canadians from Exaggerating Their Incomes on Mortgage Applications
Matrix Mortgage Global – CMHC Looking for Solution to Stop Canadians from Exaggerating Their Incomes on Mortgage Applications
The Canadian Mortgage and Housing Corporation (CMHC) has long been citing concerns that some Canadians may be overstating their income when they apply for a mortgage and they are now urging Canada Revenue Agency (CRA) to play a larger role in detecting this form of mortgage fraud.
Since new lending rules have made it more difficult for some to obtain the mortgages they want from traditional lenders, it is feared that certain mortgage buyers may be fibbing about their income when they apply for a loan. In fact, a number of lenders have already reported that they are having trouble with clients who inflate their income on their mortgage applications. Doing so is dangerous because it can quickly lead to an inability to pay.
Some economists fear that a combination of overstated incomes along with rising house prices could lead to a situation like we saw in the United States a few years prior to the subprime mortgage crisis.
Currently, the CRA is exploring how it might be able to verify taxpayer incomes for the CMHC while keeping that information secure. Because CMHC provides mortgage insurance and covers losses when there is a default, it is in their interest to ensure that they are getting the most accurate information possible about a client’s income.
The CMHC intends to soon start publishing reports on mortgage fraud statistics – something that has been available in places like the United States and the United Kingdom for some time but not in Canada.
Advice for Homebuyers
While it can be tempting to want to exaggerate your income in order to get approved for a larger mortgage, doing so is actually a crime.
It is far better to tell the truth and move into a home that you will be able to afford now and in the future. If you are unable to get the loan you want from a traditional lender, a mortgage broker will often be able to help you out.
Mortgage brokers work with a wide variety of private and alternative lenders, some of which have certain specializations such as working with people with poor credit, newcomers to Canada, or individuals who are self-employed.
If you would like to get more information on how you may be able to qualify for the mortgage you want – without having lie about your income – then contact the professionals at Matrix Mortgage Global today at 1-877-388-4058.