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Investigation finds banks more lenient with foreign mortgage customers

Last Updated Sep 14, 2016 at 11:01 am PST

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Summary

Reports show some of the big banks use different rules when dealing with foreign buyers taking out a mortgage

Ongoing claims speculators have used lenient rules to flip houses in Vancouver for big profits

VANCOUVER (NEWS 1130) – It’s not just speculators and real estate agents on the hot-seat when it comes to Metro Vancouver’s turbulent real estate market.

There are suggestions some the country’s biggest banks have different rules for foreign clients looking for a mortgage, requiring much less scrutiny than used for domestic customers.

An investigation by the Globe and Mail uncovered internal documents from Scotiabank and the Bank of Montreal, showing they have much more lenient standards for approval of foreign clients, in some cases requiring no verification of income with a minimum down payment.

The newspaper reports BMO guidelines also require that clients, including “foreign students with a valid study permit,” to have the equivalent of one year’s mortgage payments on hand when the loan is issued.

There are claims speculators have used the more lenient rules to flip houses in Vancouver for big profits.

Concerns are also being raised by critics like BC NDP MP Kennedy Stewart, who believes the banks are also opening the door to easy money laundering for foreign clients.