Mortgage fraud comes in two kinds: fraud against you, where someone steals your home’s title or your identity, and fraud against a lender, where an application contains false information. This page explains both, the warning signs, the penalties and where to report it.
Fraud against homeowners
Title fraud. The Ontario government describes it as fraudsters “using stolen identities or forged documents to transfer a registered owner’s title to himself/herself or to someone else without the registered owner’s knowledge”. They then get a mortgage on the property and disappear once the money is advanced. Home title fraud protection covers how to guard against it.
Identity theft. Someone uses your personal information to apply for a mortgage or other credit in your name. The Criminal Code makes obtaining someone’s identity information to commit fraud an offence.
Warning signs for homeowners include:
- a letter or call about a mortgage or loan you didn’t take out
- your property tax bill or other mail about the home going somewhere else
- a document registered on your title that you don’t recognize
- credit inquiries or accounts on your credit report that aren’t yours
Fraud on mortgage applications
This is when an application misstates something to get a bigger or easier mortgage:
- Income or employment: a fake employment letter, inflated pay stubs or altered tax documents.
- Down payment: hiding that the down payment is borrowed or presenting a loan as a gift.
- Straw buyers: someone with good credit buys a home for a person who couldn’t qualify, often for a fee.
- Inflated values: a property valued above what it’s worth so a larger loan is advanced.
Red flags when you’re applying:
- someone offers to “make the numbers work” or prepares documents you haven’t seen
- you’re asked to sign blank or incomplete forms
- you’re offered money to put a property in your name
- you’re told to deposit money and withdraw it to disguise where your down payment came from
Penalties
Under the Criminal Code:
| Offence | Section | Maximum penalty (indictable) |
|---|---|---|
| Fraud over $5,000 | 380(1)(a) | 14 years |
| Fraud of $5,000 or less | 380(1)(b) | 2 years |
| Forgery | 367 | 10 years |
| Using a forged document | 368 | 10 years |
| Identity theft | 402.2 | 5 years |
| Identity fraud (personation) | 403 | 10 years |
The lender can also demand repayment and enforce the mortgage, and a signature on a false application is yours even if a broker filled it in.
What to do and where to report
If you’re a victim, the Ontario government recommends that you:
- report it to your local police
- get advice from a lawyer
- contact the land registry office where the property is registered
- speak with your bank
- ask Equifax and TransUnion for a security freeze on your credit file, which is free
Also report it to the Canadian Anti-Fraud Centre, online or at 1-888-495-8501. In Ontario, victims may be able to claim compensation from the Land Titles Assurance Fund. If you have title insurance, contact your insurer.
If a broker or agent suggests misstating anything, walk away and report them to the provincial regulator. Brokers are licensed provincially; in Alberta, for example, the Real Estate Council of Alberta regulates mortgage brokers.
Related pages
Sources
The figures and rules on this page come from these sources, last checked against them on September 25, 2026. How we check facts.
- Justice Laws (Canada): Criminal Code