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.
