Ottawa probes mortgage brokerages

Ottawa is looking into mortgage brokerages, not to make sure they’re lending responsibly, but to make sure they’re protecting personal information.

The audit, which industry sources say began this month, is looking into the potential misuse of consumers’ information to carry out fraud such as identity theft. It’s an issue that carries added significance in the wake of the U.S. subprime mortgage crisis, because mortgage brokers and lenders are now being pushed to request even more information and documentation from borrowers.

“The reason that we are doing this is we have been concerned that personal financial information of Canadians might have been falling into the wrong hands,” said Anne-Marie Hayden, a spokeswoman for the privacy commissioner’s office.

“There have been numerous breaches reported to our office over the course of the last year or so.”

Ms. Hayden stressed that the audit is still in the preliminary stages, and it is too early to say what practices within the industry it might uncover.

Have you applied for a mortgage recently?  Are you aware of the privacy policy for the mortgage brokerage you applied with and do you feel comfortable giving them your personal info?  Apparently there’s no law that brokerages have to disclose when a breach has occured.

“There is tremendous fraud going on in the broker industry,” said Alex Haditaghi, chief executive of Mortgagebrokers.com, a Toronto-area mortgage broker. The privacy commissioner’s probe is “much needed,” he added.

Mr. Haditaghi said his firm carries out credit checks and criminal record checks on brokers before they join the company, and has put a privacy policy in place.

The Financial Services Commission of Ontario, which is responsible for the oversight of mortgage brokers in that province, recently issued a warning to the industry that it has “received a number of complaints from mortgage brokerages regarding fraudulent activities by their mortgage agents, who were fraudulently accessing clients’ credit information without proper authorization.

“The mortgage brokering industry’s reliance on personal information to complete mortgage transactions makes it a target for individuals who wish to gain access to personal information for the purpose of engaging in criminal activities.” Brokers are required to obtain the borrower’s consent to check their credit history.

An official at one mortgage brokerage said in an interview that a broker signed up with their firm and proceeded to carry out hundreds of credit checks in the span of 24 hours.

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NO -LYMPICS

Mish's views

He claims Canada, when compared to other countries, has a massive housing bubble that is going to implode .

http://globaleconomicanalysis.blogspot.com/2009/0

Canada can't get a handle on mortgage brokers?

They are connected to the RE industry.

The industry is tainted top to bottom….we can't let that bubble pop can we ?

Wreckonomics

Regarding the brokerage probe- so they're not worried this might happen, they actually know that identity theft has occured from info provided to mortgage brokerages?!!

How can it not be the law for these places to inform of breaches? How long do you have to wait to find out if you are a victim?

Anonymous

Most of kids' educations come from parents not the schools. Sure some schools may not be a good fit for some kids but prissy private schools have their own warts. You can't give a kid' a good education without decent parenting. People who have gone through private school know there are more than a few screwups being shuffled through.

NO -LYMPICS

Lilypad

It was me that asked re: the school issue.

One can swap anecdotes and one can swap experience.

Of course, there is good and bad everywhere you look.

And yes, I am sure a private school is not for everyone.

It's rather sad when a child's friends get yanked out of school in either elementary or high school and sent to private school because the parents have had enough of the " world class BC publicschool system ".

Once you walk a few miles as a parent in the public school system, then you'll understand.

NO -LYMPICS

Re disclosure:

Professional groups usually draft their own guidelines, ethics, etc. in order to be self regulating . On the privacy issue, and give privacy laws, one would expect all professional groups to abide by these same privacy laws the gov't follows.

If a breach of privacy is happening or possible, a quick fix is that the client add to any written agreement that all information disclosed is CONFIDENTIAL and not to be provided to any 3rd party. There is nothing to prevent you to add that to any agreement you sign if it is not already included.

Lilypad

Welcome back, Pope! Well, personal privacy is not something I have found at least one mortgage brokerage to take seriously. I was applying for a mortgage one time and found out that the mortgage broker was revealing any of my personal and financial information to the realtor that the realtor wanted. When I confronted the mortgage broker she seemed unconcerned and when I confronted the realtor she was argumentative saying that she was the ethics board of the real estate board. So there you go. Needless to say I haven't dealt with either since. Oh, by the way to whoever it was that asked — I don't have children in public school (or private school) but one of my friends put her sons in private schools and it turned out bad. She is still paying off the $25,000 fee to… Read more »