Income Verification: Estate Speculation and Money Laundering

income verification: Critics say that puts locals at an unfair disadvantage and inadvertently encourages real estate speculation by foreigners who have easier access to credit, according to Globe and Mail. The federal regulator chastised the banks in July for inadequate foreign income verification because they can be exposed to more risk if they do not ensure these clients have the means to pay their mortgages in the long term. Canadian applicants must still prove their sources of income. The regulator also pointed out that banks can be vulnerable to money laundering if they do not verify that a customer money was obtained legitimately. The revelation stems from a Globe and Mail investigation that showed Vancouver real estate speculator Kenny Gu was able to buy and flip several single-family homes – while prices in the area skyrocketed – using credit from Canadian financial institutions. The Globe discovered income verification in such cases is still not mandatory at both banks, two months after all lenders were warned to be more diligent. (www.immigrantscanada.com). As reported in the news.