Blinded by promises of high returns and overwhelmed by the fine print and information, an increasing number of investors are reportedly signing away their cash to fraudsters. Too often those dubious deals involve the direct purchase of real estate.
“We are seeing a lot more people come to us after getting involved with brokers with questionable deals,” says Paul Mangion, principal broker with the Mortgage Center.
Earlier this week, it was revealed that a number of Ontario-based investors were defrauded of almost $200k through a private mortgage investing fund. The broker who orchestrated the fund, independent of her affiliated company, was found dead last month.
The death of the broker has led to a number of allegations that she mismanaged the mortgage investment fund. Police are calling her death “unsuspicious.”
Speaking to CREW, he says that many such deals include “comforting” terms to entice the unsuspecting investor, such as “secured by real property.”
Observing a higher number of such cases in recent times, Mangion says the industry is now “flooded with people looking for quick dollars” and says that large fines and revocation of licence is now required to deter such rogue players.
“If you are going to steal money from somebody, it does not matter what regulation is there,” adds Mangion.
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Investors that do not understand the intricate elements of specific deals are being targeted by opportunistic and rogue brokers.