AB Real Estate Council Suspends Realtor For Mortgage Fraud

The Alberta Real Estate Council has suspended a realtor four months and provided him with about $26,000 in fines for his conduct in a series of real estate transactions that appear to have a lot of the signs of the mortgage fraud scams that have infested Calgary today. The story is here.

While the penalties and the fines are relatively small compared with the probable gains made, this case has many very interesting aspects. First, note in the agreed facts, that the time of issue here is 2002! A good five years earlier than most of the deals of issue today.

Note that signatures have been altered on documents. Note that the realtor in question seems to be directing “clients” to one Toronto Dominion Bank, even to one particular mortgage specialist. Many other aspects of the agreed facts are hugely interesting, and demonstrate that the mortgage fraud roots in Calgary seem to have been sewn long before the 2007 market upswing.

Of course the difficulties with this situation today in Calgary are two fold – first of all, most of the “real estate investors” who are causing the mortgage fraud problems of today in Calgary are not licensed realtors, and RECA can only deal with licensed realtors. Secondly, the penalties assessed here are way too small to have real effect to curtail this activity in Calgary. Typical deals in Calgary are netting investors at least $60,000 and up per deal, with many of the investors doing dozens of deals. A fine of $26,000 is simply a small business expense.

But this case is interesting to say the least.

Date of Story: Tuesday, October 20, 2009
Story Posted By: Ron Reinhold
Source: Ron Reinhold / RECA

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