Mortgage lenders on alert for liar loans

Two of Canada’s largest mortgage lenders say that their procedures for spotting so-called ‘liar loans’ are robust.

RBC and BMO were responding to concerns following the dismissal of a number of mortgage brokers by Home Capital due to irregularities.

The lenders said that when incidents of fraud are highlighted within the industry they step up their own scrutiny to look for similar incidents.

They also have an ongoing procedure for spotting things such as inflated incomes on home loan applications.

Both of the banks said that when processing applications calls are made to applicants’ employers to verify income claims. 

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