For the past two posts we have been talking about Quadra Homes and their promotional pamphlet for their Langley Condo Development.
Quadra made the news for their unauthorized usage of the BC government's logo when hawking their condo's. The story was headlined in the Vancouver Province newspaper: Major developer was reprimanded over unauthorized use of provincial logo to help sell condos.
But as we asked yesterday, what about counselling buyers to circumvent the new regulations against zero down payments?
Is the Langley brochure counselling and assisting buyers to do something illegal?
It's an important question because it's not just Quadra Homes engaging in this practice.
One of the contributors to our comments section (hat tip Ray) passes on a similar tactic being used by Aragon Properties at their FLO and DUO developments in New Westminster.
Prospective clients recently received this email blast:
The email clearly promotes a "Zero Down Payment Program" and says:
Instead of suggesting you find a generous uncle to spot you the $10,000 down payment until the grant arrives (at which time you pay him back), Aragon says they are offering to loan you the money you need for the down payment themselves.
Perhaps instead of pursuing the unauthorized use of provincial logos to help sell condos, the government should be looking at what appears to be widespread illegal use of the first time home buyer grant to circumvent CMHC mortgage insurance regulations?
Just a thought.
================== It's an important question because it's not just Quadra Homes engaging in this practice.
One of the contributors to our comments section (hat tip Ray) passes on a similar tactic being used by Aragon Properties at their FLO and DUO developments in New Westminster.
Prospective clients recently received this email blast:
The email clearly promotes a "Zero Down Payment Program" and says:
- 95% insured mortgage financingIt certainly looks like Aragon Properties is leveraging the BC first time home buyer grant like Quadra was... with one significant difference.
- 5% down payment loan with flexible terms
- Offer effective until March 31, 2013
Instead of suggesting you find a generous uncle to spot you the $10,000 down payment until the grant arrives (at which time you pay him back), Aragon says they are offering to loan you the money you need for the down payment themselves.
Perhaps instead of pursuing the unauthorized use of provincial logos to help sell condos, the government should be looking at what appears to be widespread illegal use of the first time home buyer grant to circumvent CMHC mortgage insurance regulations?
Just a thought.
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The other question is - what person with actual money not committing fraud would be stupid enough to move into these sub-prime dorms. Future foreclosure city.
ReplyDeleteDoes it surprise you that the Police have not investigated this !!! The're too busy handing out speeding tickets. No money to be made prosecuting these scam artists
ReplyDeleteTypical RE Industry . Its not a wonder why they have such a black eye . IT's the 95% of RE Agents that make the other 5% look like scum
ReplyDeleteThanks for shining a light on this fraudulent abuse of taxpayers money. I've become so desensitised to fraud in the province, it just rolls off me like water off a duck.
ReplyDeleteTime to start reporting these guys. One complaint may not generate much attention but if everyone here sends in a complaint they may actually look into it.
ReplyDeletehttp://www.cmhc-schl.gc.ca/en/hoficlincl/moloin/moloin_005.cfm
Approved lenders should notify CMHC via e-mail or fax using form CMHC 3092 "Advice of fraudulent/False/Misleading Loan — Information". Email fraud@cmhc.ca for your electronic copy of the form or email the CMHC account number as well as a brief description of the suspected fraud/misrepresentation.
Desperate times = desperate measures.
ReplyDeleteIt's easier to prosecute the person who buys these gems then the perpetrators who got them into it.
Sort of like big bank corruption vs. a teller who takes $500 to pay a food bill - go figure.
Cheers,
"...without the need to move funds from your other investments".
ReplyDelete(...uh...right!)
I have to admit, I'm somewhat speechless about the blatant abuse of CMHC regulations here.
ReplyDeleteWhere is the defence of taxpayers funds here?
They must know people have a difficult time saving money. Why else would they entice people with this "program" to trap them into a mortgage? Well, people are in debt and if they can't save 5%, then they shouldn't even THINK of getting a mortgage. It will must make things worse and more difficult. And mortgaging a place is a lot more expensive than renting a place. That's fact in Canada.
ReplyDeleteThis first time homebuyer's rebate only applies to new construction? Isn't this for the purpose of the transitional period before the HST is extinguished from April 2013? So, not only are they using the $10,000 toward the downpayment, their final bill will have HST added on as well.
ReplyDeleteWhen you are finished with your anger here, you can continue by watching: http://www.pbs.org/wgbh/pages/frontline/untouchables/
ReplyDeleteYes... excellent Frontline segment.
DeleteLong segment, but informative. You think it has some reflection of the Canadian mortgage business?
Delete"Flexible" Yes, I imagine. The developer need not ever get repaid by the buyer. All they need to do is inflate the price of the home by the amount of the downpayment. Voila, the bank pays them back upon closing.
ReplyDeleteOnce case I remember, Patsy Hui, the realtor got her license suspended for helping a buyer do exactly that many years ago. I guess she was ahead of her time. This was when the industry still had standards, real estate prices did not shoot through the roof, 25% downpayment was required, or 15% down through CMHC, and buyers had to qualify for a mortgage. Ah, the good old days when you didn't need a million to buy a house. What does it take these days to get a realtor's license suspended?
DeleteIt is really surprising that after these types of fraud increase cases still police is not at all taking any steps regarding this. It’s high time that each and every issue should be reported, so that police becomes active about it.
ReplyDelete