Breathtaking’: Fake mortgage b
Breathtaking’: Fake mortgage broker case reveals widespreadproblems In a real estate market saturated with stories about moneylaundering, offshore conniving and even murder-related propertydepreciation — it’s easy for allegations against one unlicensedmortgage broker to get lost in the fray. After all, BritishColumbia is used to stunning examples of greed and deception. Butthe activity outlined in last week’s cease and desist order againstJay Kanth Chaudhary is something different entirely. Not justbecause Chaudhary is accused of using fake financial documents todupe lenders into giving out half a billion dollars worth of loans.But because an entire network of licensed professionals are beinginvestigated for helping. And because hundreds of customers wereallegedly willing to turn a blind eye if it helped them get amortgage. “I guess to me what’s remarkable is the widespreadapparent — there’s no word for it really other than ‘corruption’ —of licensed people,” says Ron Usher, a professor of property law atSimon Fraser University.1 … 1 Source: CBC News Online, June 4,2019:https://www.cbc.ca/news/canada/british-columbia/mortgage-fraud-realestate-corruption-1.5160842
Read the news story above by clicking on the link above. Answerthe following questions: 1. Explain what is happening in this newsstory. Give a brief summary. 2. What is wrong with the system usedin this story to help people borrow money? 3. Accurate Information:a. Is it true that the system of financial institutions must haveaccurate information in order for the system to work? b. Why doesit matter that the institutions have accurate information? 4.Regulation: a. Is regulation of financial institutions stillimportant in Canada? b. Why or why not?
Answer:
1. The news article looks into the case of Jay Kanth Chaudhary,an unlicensed broker who generated huge sums of money luring peoplewho did not have the financial capacity to get these mortgage loansthrough licensed brokers and serving as a case of shadowbrokers.
2. The system used is illegal, as the tax documents were forgedto get the mortgage loans for people who didnt earn enough to makethe mortagage periodical payments.
3. Yes, the system of financial institutions should have theaccurate information in order for systems to work as the inaccurateinformation or the one which is not disclosed makes it difficultfor the fin institutions to have a track on payments and it resultsin lack of credibility for them as these act as bad loans or theones which are not honored by the loan recievers
4. Yes, regulation of financial institutions is important inCanada where the federal govt is responsible for supervision ofcommercial banks, institutions providing loan, this is done toprotect the financial sysytem from such cases of money launderingand so that unlicensed brokers like chaudhary dont find a loopholeinto the system which they feel fit to exploit.
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