All Forum Posts by: Jeffrey Seid

@Kyle J.

Not real estate agent, the agent that works with the bank. Mortgage agent

I decided to get pre-approved with another bank although I was already pre-underwritten with another institution because they promised much lower rate as well as a big cash back.

My question is: This agent asked me if I could send him my pre-approval letter from the other institution I was pre-approved with along with all my other papers. 

Why the hell would he need my pre-approval letter? If I am getting pre-approved with another institution I expect them to do their own credit check/research.

NOA can easily be photoshopped/falsified.

So the general consensus is that indeed Canadian banks can’t verify Tax returns? Yikes!

@Zach Bousquet

Thank you for your response!

The reason I am asking is because self employed and people who have a comission/tips based salary will often be ignored by the biggest bank unless they provide 2 years of tax return. They will then either take the average of the 2 years if your income is up, or the lowest if It’s on the decline.

If they don’t verify tax return, one could inflate his returns and make up his history especially if self employed. In quebec for instance, you don’t even need to register your business if you are sole owner & using your own name. 

People who work on commission/tips/bonus could be annoyed by the 2 year rule that can require almost 3 years of history with a company unless you perfectly start your commission based job in January. If you start in summer you will lose half of that year on your tax returns and it will make it seem as your job doesn’t pay well.

Of course you would need your employer to falsify your start date, but most businesses will do to help their employee achieve his homeownership dream.

The fact that Canadian banks can’t verify tax returns makes it very easy for mortgage fraud. 

T4, T1 can easily be falsified if your employer backs you up. The only way banks can verify you are telling the truth is if they can check your tax returns/T4 slips with the CRA

In usa, if you are going with a big bank (low interest mortgages), and they have doubt about your self employed income, they will pull your tax returns themselves, not ask you for a copy you can easily falsify.

I always wondered how lenders verify tax returns in Canada. In the Usa, lenders can make you fill up a form that will allow them to pull your tax returns themselves, but such practise doesn’t happen in Canada.

 Lenders in Canada can verify your bank statements of the last 3 months, so they can see if you are making up fake pay stubs. 
They can also call your employer to verify your information (start date, salary, etc...), not to mention they can check your credit for every debt you have.
However, has anyone have any idea how they verify tax returns?

To my knowledge they can’t because CRA doesn’t share any information with them, although it may change in the future