Excessively restrictive qualification rules are forcing a growing number of Canadian millennials to commit mortgage fraud, according to a new Equifax analysis.
“People might see themselves as a responsible borrower, they may feel lender guidelines are too strict, that they would be fine carrying a higher amount of debt,” Equifax Canada director of consumer advocacy Julie Kuzmic told HuffPost Canada in an interview.
The survey found that around 23% of Canada’s young adults consider it acceptable to lie during their mortgage applications, which was nearly twice the rate observed among all other respondents (12%).
Moreover, 19% of millennials said that they provided false information in a previous application, compared to the 12% rate in the rest of the population.
Inflamed competition among would-be buyers, especially in high-value markets, is another source of pressure for millennials.
“People are concerned they might miss out, and if they don’t qualify for the home they’re hoping for, they may never be able to buy a home,” Kuzmic explained.
Alarmingly, among many millennials, getting a home period seems to be more important than doing so legally. As much as 23% of the cohort indicated a belief that mortgage fraud is a “victimless crime,” compared to the 16% rate in the general population.
“It’s concerning that so many younger adults we surveyed believe it’s OK to inflate their income to purchase the home they want,” Kuzmic stated.
“Fudging income numbers when completing a mortgage application is fraud. It also becomes a slippery slope for these people who may end up stretching themselves too thin.”