Mortgage scams are getting more sophisticated. Here’s what to watch for.
If it feels like mortgage fraud warnings are showing up more often lately, that’s because they are.
Ontario’s regulator has issued a string of public warnings this year about unlicensed individuals arranging private mortgages, and at least one recent GTA case involved a lender pressuring borrowers.
Homeowners with paid-off properties or a lot of equity are the most attractive targets, since there’s no bank keeping an eye on the title.
Here’s how to protect yourself from mortgage scams before you sign anything:
Mortgage Scams: 4 Red Flags to Watch For
1). Pressure to close fast.
Legitimate lenders give you time to read the paperwork and talk to your own lawyer. If someone’s rushing you, that’s the mortgage scam working, not a good deal.
2). Telling you not to call your lawyer
This is one of the clearest tells. Scammers don’t want a second opinion in the room.
3). Upfront fees for a “guaranteed” approval.
Real lenders don’t ask for cash before anything is finalized. If a broker wants a deposit just to “get the ball rolling,” walk away.
4). Unlicensed brokers
Anyone arranging a mortgage in Ontario needs to be licensed through FSRA. It takes two minutes to check the public registry and it’s worth it.
The top 5 most common mortgage scams
Here are the top 5, based on cases and regulatory reports from the GTA in the last two years
Title and identity fraud.
Fraudsters impersonate a homeowner or hijack a company record to mortgage or sell a property without the real owner’s knowledge.
CBC Toronto identified organized crime groups behind at least 30 GTA homes sold or mortgaged this way, and in a separate 2025 case, fraudsters hijacked a Mississauga business’s corporate record to try to mortgage a $12-million mortgage-free property for cash. Paid-off homes and commercial properties are the main targets since there’s no existing lender watching the title.
Predatory private mortgage schemes.
A private lender arranges escalating, high-cost mortgages against a borrower’s equity, sometimes pressuring them to sign releases waiving their right to complain to regulators.
FSRA’s warning on a GTA lender relied on a December 2024 court ruling that voided a release a borrower had signed, one that said the lender bore no liability and that she couldn’t contact regulators about his conduct. Private lenders are a real force in the market, accounting for 15.8% of Ontario’s mortgage market in 2024, with over 65,000 loans worth $32 billion, and 53% of borrowers using non-traditional lenders had household incomes under $40,000.
Pre-construction deposit fraud.
Someone collects deposits on homes in developments they have no legal affiliation with, often walking prospective buyers through the actual site to seem legitimate. One Peel Regional Police case saw a man face fraud charges on three separate occasions in 2024 and 2025 for allegedly accepting payments for homes in developments where he had no legal ties, with one victim alone reportedly out nearly $100,000.
Renovation and contractor fraud involving mortgage funds.
Fake or unlicensed contractors take large upfront deposits or bank drafts, then disappear or leave work unfinished. One 2026 GTA case involved two victims losing a combined $296,000 in a scheme tied to mortgage funds and bank drafts, alongside smaller cases in Ajax ($18,000) and Peel Region ($37,000 in deposits for work never done).
Falsified mortgage applications
Typically inflated income or employment documents to qualify for financing that wouldn’t otherwise be approved. This remains flagged as the dominant mortgage scam in the GTA, with new-to-Canada and new-to-credit borrowers facing more than double the fraud rate of established borrowers, since thinner credit histories are easier to misrepresent.
Trust your gut and do your research.
If something about a mortgage offer, a refinance or a title document feels off, trust that instinct and get a second opinion before signing.
Need a second opinion? Easy House Loan is a licensed mortgage broker in Etobicoke, Toronto and Mississauga that is working in your best interest. Give us a call to learn more.
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