OSC Accuse Home Capital Of Falsified Mortgage Information

Home Capital, a non-prime lending company based in Toronto that issued mortgages to people refused by traditional banks since the resignation of a co-founder Gerald Soloway as CEO of the company, the company realized setbacks including 78% drop of the company’s share price and also realizing a drop on the deposits required for funding.

But this problem was traced back to a release by the company in July 2015, when the firm disclosed that it cut ties with 454 mortgage brokers after investigations proved that information of borrowers including income and employment information was false just to ensure loans were obtained.

However in April, the Ontario Securities Commission accuse  Home Capital and executives including Soloway for involvements in misleading investors by failing to disclose the consequence of the investigation for months. The company said the allegations levied are without grounds saying they met all requirements for disclosure but fears of the collapse of Home Capital takes over as investors withhold investments.

“Most of the brokers and agents who were the subject of our review continue to be licensed mortgage brokers and agents” wrote spokesperson of the Financial Services commission of Ontario in his email after a review of the suspension of mortgage brokers by Home Capital saying the company requires a higher level of proof than individual lenders do. “When you have a hot market where people are reaching for that home that next month they can’t afford, they get more creative” said Mike Rizvanovic, a financial service analyst at Veritas Investment Research as a lot of falsified cases arouse with regards to mortgage.

Though it is impossible to quantify mortgage fraud, Equifax Canada data showed a representation of 52% of increase of suspect mortgage applications since the year 2013 and the research also gave a representation of 13% of Canadians who believe there is no harm in telling a little lie to get a mortgage, as some lie with regards to their earnings by altering the Canadian Revenue Document but the situation in Home Capital questions Canada Mortgage and Housing Cooperation which is responsible for backing of mortgages that require insurance.