BMO suing over huge mortgage fraud
The CBC is reporting that the Bank of Montreal is suing hundreds of people in Alberta over alleged mortgage fraud that falsely inflated the value of many properties. They’re suing lawyers, mortgage brokers and four of their own employees and claiming a loss of up to 30 million dollars.
Other banks don’t appear to be as aggressive in their approach, even though documents indicate they may have been targeted too. Bank of Montreal investigators found documents that showed one Calgary management company had 150 suspect mortgages from 16 different financial institutions.
Rosen said this alleged fraud illustrates how weak and ineffective the controls are in our banking system.
“To me the most exasperating part of our business is we are not doing what we are supposed to be doing,” he said. “We are kidding ourselves that we have good systems, because we don’t.”
A number of these fraud cases showed up in the US as prices declined, funny how they didn’t seem to show up as prices were rising. Read the full article over at the CBC.
May 6th, 2010 at 9:11 am
I don't April 19th will have as much impact as hoped. The reality is that rates are still very low and there is still a sizable pool of buyers why are trying to take advantage of pre-approvals.
May 6th, 2010 at 7:45 am
@Debt Merchant:
Thanks for the link. Interesting days ahead.
May 6th, 2010 at 7:09 am
Net new listings is still tracking at 170. A month of that would get us above 20k.
As for sales I suspect it's all the purchases that were booked pre April 19th with subjects being removed. The banker I talked to implied they had some wiggle room.
May 6th, 2010 at 4:02 am
@jesse:
Note that the bank claims to have started seeing problems in 2006, but is only suing now. Alberta saw a 20% bust from mid-2007 to the end of 2008, only partially reversed. That's what probably got the big guns at BMO worried. Lenders don't worry about fraud when prices are going up – as seen south of the border and now here – so they don't bother doing tough appraisals. Just wait for this stuff to start coming out when the bust gets under way here – we'll make Alberta look like the little league.
"When the tide goes out you find out who's been swimming naked"
- Buffett
May 6th, 2010 at 1:52 am
April (Units sold)
1995 = 1712
1996 = 2715
1997 = 2987
1998 = 1788
1999 = 2101
2000 = 1813
2001 = 2314
2002 = 3877
2003 = 3192
2004 = 4215
2005 = 4174
2006 = 3434
2007 = 3407
2008 = 3308
2009 = 3002
2010 = 3574
May 5th, 2010 at 11:43 pm
@anon Perhaps an influx of greater fool is inexhaustible here, who knows?
May 5th, 2010 at 11:21 pm
The continuing strong sales is a little worrying indeed.. was hoping to see them fall off sooner.
May 5th, 2010 at 10:50 pm
Increased listings flooding the market over the past few months. Updated interactive charts “Greater Vancouver Monthly Real Estate Statistics 2006 – 2010 ” :
http://canadabubble.com/charts…..stats.html
The months of inventory still stuck in the "5" region is a worrying sign. Sure inventory is rocketing but so are the sales. When will the buying stop and enable the MOI number to reach the dizzy heights of 20 – the level it reached back in 2008?
May 5th, 2010 at 10:13 pm
@Frank, regarding "No one HAS to own. they can rent, they can move, they can commute",
A lot of people don't think about the "move" idea, in context of owning a home. "Owning" ties you down. And when times get tough and the economy tanks and homeowners lose their jobs, they face huge challenges moving to another city where there might be employment, 'cuz that will force them to sell in a deflated market and deal with the painful consequence of being upside-down on their mortgage. Many likely learned this the hard way during the U.S. housing bust, and we're about to learn it here. If you need to be highly leveraged to buy, don't. Rent instead! If you have lots of cash and CAN buy, don't. Rent instead! Renting is the new wisdom. Be smug if you're a renter.
May 5th, 2010 at 10:12 pm
Hey superboomtime (aka Thompson)
you're on your own here….no Johnny Horton to back you up.
May 5th, 2010 at 10:00 pm
@Nero: I told you bear that as inventory rises so does sales because supply feed demand. Just like oil exploration bear. You get more oil and you want more of it. Key to investing in it is to get it while you can bear.
May 5th, 2010 at 9:54 pm
policing and nursing is much more demanding than it used to be. police now do a lot of what judges should be doing and nurses do a lot of what doctors used to do. i have no issue with their renumeration. firefighting is a joke job, in most societies it is a volunteer job. goons have been fighting fire for potential glory and empathy instinct since caveman days. teachers have too much time off for what they are paid. as time goes on i seem to know less and less nine to five regular jobbers. seems everyone in this town works either odd hours, contract work, off and on, on some sort of government compo, or flat out too wealthy to work.
May 5th, 2010 at 9:38 pm
@paulb:
Wow, a lot of sales? Any reason why so many sales?
I'm just assuming prices aren't very sticky and sellers are motivated? Then we should be seeing a lot of reductions?
What % of asking price are the sale prices?
May 5th, 2010 at 9:24 pm
Inventory,
I appreciate your lists but I remain deeply troubled by the weak out of town numbers. LOL
May 5th, 2010 at 9:10 pm
New Listings 390
Price Changes 150
Sold Listings 224
May 5th, 2010 at 9:06 pm
Turns out yesterdays numbers were absolute monsters.
Today, a little tamer.
Dailies – List | Sold
Vancouver East & West*
New Listings – 59
Back On Market Listings – 2
Price Changes – 32
Sold Listings – 50
Vancouver All Areas*
New Listings – 265
Back On Market Listings – 14
Price Changes – 120
Sold Listings – 151
Yesterday's Totals
Vancouver East & West*
New Listings – 218
Back On Market Listings – 5
Price Changes – 112
Sold Listings – 111
Vancouver All Areas*
New Listings – 716
Back On Market Listings – 34
Price Changes – 355
Sold Listings – 334
*Attached & Detached @ 05/05/2010 @ 17:45 PST YatterMatters.com:
May 5th, 2010 at 8:57 pm
************* 1/1/2010 / 5/5/2010 / % change
Bowen Isld 46 / 106 / 130.43%
_Bby East 68 / 162 / 138.24%
_Bby North 345 / 731 / 111.88%
Bby South 362 / 751 / 107.46%
Coquitlam 531 / 1144 / 115.44%
Van.&Gulf 215 / 266 / 23.72%
___Ladner 65 / 151 / 132.31%
MapleRidge 575 / 1027 / 78.61%
_New West 262 / 583 / 122.52%
_North Van. 412 / 983 / 138.59%
OutofTown 105 / 69 / -34.29%
_Pitt Mead 121 / 189 / 56.20%
_Port Coq. 237 / 468 / 97.47%
PortMoody 213 / 442 / 107.51%
_Richmond 893 / 1894 / 112.09%
_Squamish 402 / 506 / 25.87%
Sunshine C. 656 / 1082 / 64.94%
_Tsawssen 98 / 201 / 105.10%
__Van East 767 / 1484 / 93.48%
_Van West 1396 / 3380 / 142.12%
_West Van 386 / 708 / 83.42%
__Whistler 569 / 757 / 33.04%
_____Total 8724 / 17084 / 95.83%
May 5th, 2010 at 8:51 pm
Starving Artist has some wonderful graphs from past years showing sales month by month. What does a "normal" May look like for sales?
4200 sales has been typical of the boom years, which is an average of 210 per working day. My data show sales as low as 2000 a decade ago. If sales average 150 per day, that puts us at 3000 sales for the month which is what May '08 sales were. That would be a decidedly bearish signal given how fast inventory is increasing. Rising inventory and low sales happen at the same time for a reason!
Watch those daily sales data from Paul. They are the keyhole through which to view the rest of 2010.
May 5th, 2010 at 8:35 pm
@Debt Merchant: Gee, a corrupt MP huh? Looks like we've got an answer to the question of what government intervention is still left to keep prices from dropping.
May 5th, 2010 at 8:25 pm
BTW Vandan you sound like you feel society owes you the right to buy a home.
Isn't that what got us into this mess in the first place.
No one HAS to own. they can rent, they can move, they can commute.
May 5th, 2010 at 8:23 pm
I have farted out several smarter sounding things than that you moron!
MORON!
May 5th, 2010 at 8:19 pm
Your an UGLY blob of snot.
May 5th, 2010 at 8:18 pm
@Royce McCutcheon: Here's a CBC article with more info on the 'strawbuyer' scam and how it works for all those that say 'how does the bank lose money if they still have the mortgage paid?'. In that article they mention a US estimate of 4 to 6 billion in mortgage fraud losses each year, with 80% of that involving insiders, the rest being organized crime.
Speaking of insiders, they are now reporting one of the people charged in this BMO fraud is conservative MP Devinder Shory. He's alleged to have acted as a lawyer in at least 5 of the fraud cases and have run 3.7 million through an account connected with the fraud.
May 5th, 2010 at 8:18 pm
Stick your nose up my ass you loser!
May 5th, 2010 at 8:18 pm
Suck an Egg you crackpot
May 5th, 2010 at 8:14 pm
Man there is a lot of anger on this forum.
Now it is directed at nurses and firemen and police for their salaries!!
Shake your heads folks.
Don't blame everyone else for where you are in life. You can do any of these jobs. We could have all bought at any time.
We made our decisions, let us be mature enough to accept the consequences without looking for scape-goats to blae when it doesn't work out.
May 5th, 2010 at 7:01 pm
The cente for policy alternatives released a study today indicating that a family of four in Vanc now needs 63800 p/a to subsist in Van. That does not include a mortgage. If the new poverty level is 64K does that mean theres still no official confirmation that inflation is rampant? Didn't think so.
Raising the wages across the board for service workers has the effect of raising revenue for the government as income taxes and additional taxes on the taxpayer. The 64K number is far higher than the average wage that the gov suggests is what it takes to hold down a mortgage. Who's lieing here?
Posters here seem to missing the point. It is not that cops nurses and such deserve or don't deserve the wages they get. The fact is that we are running out of money to pay them and their services are no longer affordable at the current velocity of expansion. These expenses must be curtailed and yes I'll say it, rolled back considerably.
The government is benefitting from inflating prices but once you get to the Greek stage then you get a collapse and thats where we're going. Wages and expenses must be rationalized and soon. The idea that the taxpayer is a bottomless pit or some kind of slushfund is unsupportable.
May 5th, 2010 at 5:51 pm
As long as a construction worker with a grade 8 education and a mullet can make $25 an hour for slapping together condos I don't have a problem with the wages paid to nurses, cops or teachers.
May 5th, 2010 at 5:43 pm
Hey leaving says
Moderately trained Nurses, Cops and Garbage men are making $100,000 of public money every year, and now foreigners can come into my country and steal from me too, run up housing and default on federally insured mortgages so they can drive around in expensive cars and fund terrorism while I take public transit to work every day and try to scrimp and save so that I can afford something that I can take pride in, only to find that that costs 2M in Vancouver, which will take me 42 years to save up.
I really disagree with your statement about nurses. It takes four years of university to become an RN today.There is usually a 2 yr waiting list. A frontline RN with 9 years experience actually makes about $80K before taxes today. If they make more it's because of the overtime they're often forced to work.
RNs are there when you're born and if you're lucky they'll be there when you die, maybe the only people on earth who will care for you.
So don't get caught up in the BS, blame worker game that Gordo and the Cdn Taxpayers Ass wants you to play.
You can't afford to buy a house because of our society's greed, not because nurses have fought for years to make their profession a well-paying one. But with today's bubbly prices most still can't afford to buy in Van. So bring on the bust.
May 5th, 2010 at 5:35 pm
Still plenty of sales, inventory is climbing, but folks are still buying. I think when the BOC starts raising it, it might start cooling off, but right now, plenty of low rates still going around.
Or maybe I just don't know shit.
May 5th, 2010 at 5:21 pm
New Listings 270
Price Changes 120
Sold Listings 142
May 5th, 2010 at 5:07 pm
All this verbiage about salaries and degrees acts on me like pepper spray. I might go back to hibernation…
May 5th, 2010 at 4:58 pm
@anonymousAA: I for one, believe that the market path is the same either way – down.
the scenario – rates don't increase as expected
majority of people thought the rates would increase so dove in already to buy. those buyers are already out of the market anyways. the huge buying surge in the last couple of months are all tomorrow's buyers fast forwarded to today based on the fool's gold of great rates. that group is on its tail end anyways
the next group, those sitting on the fence on whether to buy or not – upon hearing this news, with even a little bit of research, will likely be comforted in knowing there is no imminent rush and will wait it out until a price correction.
I and many others in my large office fit this bill. technically, i could purchase today – and with the way rates are, i have to admit it's been more than tempting. had the rates gone up, it would've been "expected" and there would be that much fewer buyers leading to a correction anyways. if the rates don't change, seeing changes in the market already will give me comfort in knowing i can wait it out.
May 5th, 2010 at 4:49 pm
A fairly good article on stuff to do before you purchase a condo but I doubt most people would bother. The bigger the purchase, the less work people seems want to do before buying. Odd isn't it??
http://www.theglobeandmail.com/globe-investor/per…
May 5th, 2010 at 4:44 pm
I heard on the CBC today that they may not raise interest rates as previously thought. What are the chances? I think the situation in Greece may actually make rates go higher than previously thought, something to do with risk.
But what is the future of the RE market in Vancouver if rates stay the same? I for one, think that even if rates don't go up, eventually this bubble will collapse under its own weight. Or so I hope.
May 5th, 2010 at 4:40 pm
@janie8200: You're right. We had a thread about this in the forum because idiot bulls were thrashing in ecstasy that we were 'wrong'. Thread is here.
There is no such thing as one 'true' measure of inventory. What is important is to know what is in your measure and apply it consistently. The numbers provided by paulb and 'inventory' include raw land and multiunit. The numbers on the REBGV report do not. That is the difference.
Someone might say 'but I'm not in the market for multi-unit so that shouldn't be in there.' Fine. But maybe someone else isn't in the market for townhouses so those shouldn't be in there for that person then.
If the question is: how many things are listed for sale in the REBGV system, then the numbers provided by paulb and 'inventory' provide the answer. If you ask a different question, you'll want to have a different answer.
In any case, the important thing here is that our VERY fun inventory parties are CLEARLY enraging the bulls. That's why one of the MANY reasons it is so fun!!!!!
I'll see you at the 18K party in a week or two!
May 5th, 2010 at 4:34 pm
@janie8200:
Nazi.
May 5th, 2010 at 4:30 pm
thanks everyone
now that the 17k party is officially here…again…i'm nervously excited about when 18k will open its doors.
a co-worker in my office was browsing through the RET garbage earlier – an article they had posted stated inventory levels were closer to 16k and said that this site was exaggerating on the numbers. someone at least mentioned it was due to different methods of calculation ie. here we count land or etc. (is that right?)
i told her all that's important is that with inventory and paulb's valuable information we're comparing apples to apples from say the mini-crash year of 2008. the inventory levels method counted here is they same as the method used in our 2008 #s. therefore the increase in listings is likely the same if they were to compare that articles current inventory to their 2008 numbers.
May 5th, 2010 at 4:21 pm
Latest inventory figures?
Please and Thank You.
May 5th, 2010 at 4:12 pm
@janie8200:
Fair enough. Guilty as charged.
Probably just need Inventory and Paul B's updates to snap me back in line
May 5th, 2010 at 4:11 pm
Ah, sorry for continuing the salaries discussion. I'd missed the second page! BACK TO RE!
17K Party!
May 5th, 2010 at 4:08 pm
Part of the problem with public sector overtime (and also with private sector IT), is that HR's deciding the cost benefit analysis to adding a head count and bringing staffing to a level that will fill the necessary man-hours puts the cost on the books. One cop or nurse making $110K/year (Homelife? Who needs work/life balance?) is cheaper than two nurses making $58K.
I believe that 2 folks offer better productivity and service than 1 person pulling endless double shifts, but obviously I'm not an HR mucky muck.