How this mortgage scam is placing seniors in distress of shedding their properties (Marketplace)

Investigating an elaborate scheme. Two detectivescome to my door. They said, “Well, you'vebeen scammed for your house.” Victims across Ontario signed up for a mortgage they never wanted… How much isthat mortgage for? It's at least $500,000. And a bill their families say could cost them their house..

This wasour foreclosure notice. Feeling roped in and ripped off… How is that being paid for? It's not being paid for.That's the problem. But who's behind it? I feel likethey've been victimized. This is your Marketplace. [snow crunching] We're on the trail of one of the most elaborate scams.

we've ever seen. Victims across Ontario… lured in after a knock at the door. To try to unravel who's behind it, we're knocking on those same doors… I'm Davidwith CBC Marketplace. Meeting those who say they or their families have been tricked into a mortgage they cannot afford. Did you want to havea $230,000 mortgage?.

-No.-How much is the interest rate? -25%.-I was scammed. I'm probably gonna losethe rest of the house now. Are you worriedabout losing this house? Uh, I worry, yeah.I worry, yeah. Our investigation begins in Bowmanville… [knocking on door] -Hi, how are you?-Hi, Melissa, how are you? -Come on in.- Thank you.

With Melissa Irons and Jeff Wagenaar. Oh, that was a good one. They say Jeff's 79-year-old stepdad, Karl Hoffmann, is an easy target, after a brain aneurysm years ago took away his ability to make simple decisions. Karl'sa very kind of simple man. He just sits at home,watches TV. He doesn't get out very much.

But he's now at risk of having his home taken away. Discovering equipment had been installed throughout Karl's house was a red flag. So here's, uh, a Nestthermostat that was installed. -Does Karl know how to use it?-Absolutely not. He has to call me every timeto adjust the temperatures. All right.Show me what else. Uh, well, we havea Google smart smoke detector. All right.

The money for all this came from long-term contracts and liens against his property, meaning his house was being used as collateral. Karl has watersofteners upon water softeners. But Melissa says Karl had no idea. And what's this? A surge protector, I believethat's what they call it. – A surge protector?- Yeah.

Why would he needa surge protector? I have no idea. All right.What did they do in here? Uh, so they replacedthe toilet. Mm-hmm. They only realized something's fishy after finding workers renovating Karl's bathroom. I was irate.Scared for him. Worried. Wonderingwho these strangers were.

And howthey got into his home. He thoughtthey were here to use the washroom,not renovate the washroom. They say Karl didn't want the reno and couldn't afford it. Making matters worse, it was shoddy. They came backthree times to fix a leak. Didn't–Weren't able to fix the leak, so I had to step inand fix the problem myself.

[plumber] Jeff. And they're still finding problems. Oh, wax ring'stotally cracked. This plumber discovering the toilet was installed improperly. What's no [indistinct]?Five bucks? – It's two bucks.- It's two bucks? Yeah. Karl's family believes it's part.

of an elaborate scam designed to take his home, after finding Karl was signed up for a mortgage worth $130,000, with payments beyond his limited income and an interest rate set at 25%. Have you ever heardof a mortgage at 25%? Absolutely not.No. Karl can't pay, leading to a dramatic development. Uh, this wasour foreclosure notice that was,uh, delivered to Karl.

We've had to geta– a lawyer involved to quickly put some stopon of– this stuff so that we can tryto figure it all out so that he doesn'tlose everything. This is all he has.All he's ever had. To understand the multi-layered scheme… [knocking on door] – Hey, Greg.-Hi, David. How are you? How you doing?Good to meet you.

You as well.Come on in. …we're with Karl's lawyer, Greg Weedon. They would just, you know, sellhim things that he didn't need. It just evolvedinto a– an elaborate scam. They enter into these loans,essentially. The– They're–they're soliciting you know, renovationsand loans at the same time. Remember that surge protector? Documents show the people who created the lien for it.

are the same people behind the mortgage. They're convertingthese liens. The same peopleshow up and say, “We can help youconsolidate your debt, and we can help you takethese monthly payments down to a– a single payment,and you– you'll be able to get out of this debtby way of a mortgage.” Something Karl's family says he didn't sign, and if he did, they say he didn't understand it..

And Greg says that he would never have let Karl sign. The rate of interestis astronomical. I've– We have never seena interest rate that high. Does he have any chanceof being able to pay that? No. No.Not a chance. How does a mortgage like this happen? In this case, it went through a mortgage broker and lawyer, who are supposed to look after your best interests. Why did no one stop it?.

That's what we're on a search to find out. At this house in Toronto… [knocking] -Hi, Christina.-Hi, David. How are you?Yeah, good to meet you. Nice to meet you. …another knock at the door led to a similar story. 88-year-old Danila Lim is blind..

Her son, a retired Canadian soldier with PTSD, lives here, too. Now, her daughter, Christina, and son-in-law, William, are fighting to save the house. So, somebody came to the houseand informed my brother that there was a lienagainst the house. My brother reallydidn't understand what– what lien meant, but gotintimidated by this person. When we heard the story,it was a total shock.

There was a lot of anger,uh, thinking that, how can people preyon two people who are– one is blind, visuallyimpaired, senior, disabled. My brother himselfis disabled as well. And like Karl, renovators showed up, too. Any room that these renovatorstouched, they've destroyed it. The work is shockingly unprofessional. These huge gapsthat are left at the top, the tiling that is incomplete.

Show mesome of the other things. Well, I mean,for one thing, the waythey installed an oven. -That's their finished product.-What? That's howthey decided it should be left. They just putlaminate and cardboard to level it? That's right.To level the– to level the– -But ovens have—They have feet.

I guess they didn't knowthey had feet they could level it with,I guess. And the flooring is coming apart. -Oh, yeah. Look at that.- Yeah. This is the laminate. And you could see the tilefloor that's underneath it. Yeah.So, there was a tile floor, a professionallydone tile floor. – Yeah.-Had a couple of crack tiles.

And their solution to fixingtwo crack tiles was to cover it with the cheapest laminatethey could possibly find. So, why didn't the family realize sooner? Well, this was happening in the midst of the COVID pandemic, and Christina is a nurse. But you didn't wanna makeyour mom sick. Correct. I mean,they were safe in their home. At least that's whatI– I thought that they were.

They were safe from COVID. They were safe from COVID, not knowing that therewould be these predators that would come knockingat your door. There is now a mortgageagainst this home. How muchis that mortgage for? At this point, it's–it's at least $500,000. [sombre instrumental music] It's huge.

It's huge, and, you know,I feel like they're– They've been victimized. Um, and… you know, it madeyou feel like there– there's that sense of guilt,too, of myself, to say, “well,where was I to protect them, or where werewe to protect them?” Because for the whole year, they basicallysuffered in silence.

We're learning the alleged scam has victims across Ontario. From St. Catharines to Peterborough, Barrie, Collingwood, Mississauga, and more. Many are now suing. Some acknowledge signing documents, but say if they did sign, they didn't understand. Do you feel that you'vebeen taken advantage of?.

Yes.These people, if they– They're picking people,older people, you know, the peop–uh, vulnerable people. Vulnerable people. Yes.That's what it– -You feel targeted?-Yes. [knocking] -Ernest.-Hello. He said I was gonnaget all this money back.

Wasn't gonna costnothing, but… What they said, I believedthey– they're my buddies. Do you still believethey're your buddies? No. No. I was fed the line and… I believed it. High-interest mortgages. I'm just skimping by as it is,with all my other bills. And more low-quality renovations..

So, this is the kitchenthey redid? -Yeah.-Did they put this -microwave in?-Yeah, just the micro oven. I'm curio–Oh, now, look– look at that. Oh, this isn't attachedto anything, actually. I cannot have a bath because there's no spoutto fill up the bathtub. Are you worriedabout losing your home? Yes, I am.I really am.

I have to stay aliveand fight this. [voice breaks]I'm 70 years old and I shouldn'tbe going through this. Bev reveals we aren't the only ones tracking the scheme. How did you find outthat you'd fallen into this? I had, uh, two detectivescome to my door. So, they said, “Well, you'vebeen scammed for your house.” -The police told you that?- Yes.

Until the police cameand told you– -I– I didn't have a clue.- Wow. So, I just started to cry. As we've been investigating, so, too, have police. Moving into the renovations,poor quality. Constables Lisa Cruz and Erin Fraser are with the Ontario Provincial Police… Hi, I'm David.

-Hi, David. I'm Lisa Cruz.-Lisa. -Erin Fraser.-Very good to meet you. …now partnering with police agencies across Ontario. So, Erin and I work forthe Serious Fraud Office. Um, we're a specialty unitwithin the OPP, um, that investigatemajor fraud cases. How elaborate is this scam? It's very elaborate.I– They're multi-layered. And we have, uh, multiplevictims across the province.

Police won't say who they're investigating, but the scam they're tracking sounds very similar. They are misleadingthe homeowners into entering into contractsthat are long-term. There are some,like, typical things that they put in their homes. So, there's, um,smart, uh, smoke detectors and thermostats,often not even hooked up. And police say it varies from there..

Fraudsters sometimes suggesting a financial grant, renovations, or debt consolidation, with the same end result. Homeowners are basicallymisled and duped into signingmortgage documents. But at rates that most peoplewouldn't be able to afford. Right. We're seeing,um, rates up to 25%, um, whichis very, very high. And then oncethe mortgage comes due,.

Um, the homeowners essentially can't make those monthlypayments anymore, um, almost forcing them into either selling their homeor foreclosing. Is this a long fraud? I would callit a long fraud. Yes. These fraudsters, theyare adapting it as they go. So, it's ever-changing. Um, and aswe investigate it, um,.

We finddifferent variations to it. And I thinkwhat could be happening is people might not even knowthey're a victim yet. ♪ As police pursue their investigation, we find the biggest consequence yet. All's I know is thatit's massive elder abuse. Our search for answers continues. It's David Commoncalling from CBC Marketplace..

♪ Get more Marketplace. Sign up for our weekly newsletter, cbc.ca/marketplace. ♪ This is your Marketplace. We're investigating what some call a loan-to-own scam, purported victims across Ontario, homeowners like Karl allegedly tricked.

into signing contracts and loans. He just believes everybodythat comes to the door is thereto do him a favour. It's a complex scheme which escalates into a mortgage on their home with interest rates they say they cannot afford. She was devastated.She did not actually realize that all of these thingswere happening in front of her. It's unclear who's behind it..

There are several companies providing services and knocking on doors, and multiple lenders on the mortgage documents, but all the people we've met have at least one lender in common: Canada's Choice Investments. Marlene Hamilton is among them. I miss that. I know. She spent more than 40 years.

at this house in Port Hope. This wasyours and Dad's life, gone. Lisa Amos is her daughter. [Marlene sobbing] [sombre instrumental music] So, that's home. Yeah, that's home.That was my home. This home has been takenaway from you, from your mom. From me, from my mom.

I'm angry.I'm pissed off. I'm upset. Like, words can't describehow I feel right now. Unable to make the mortgage payments, Marlene lost the house last fall. All she remembers is peoplecoming in and out of the house. People coming into renovate? Yeah.And, “Sign this, sign this.” Even though Lisa says her mom can't read..

Did she know there wasa mortgage on her place? No. All's I know is thatit's massive elder abuse. Documents showMarlene's mortgage went throughthis brokerage in Brampton. Not everyone used this one,but Karl and Danila did. Mortgage brokersare required to act in their clients'best interests, but both Karl and Danilaare suing, saying,.

Centum Mortgage Smartfailed them. The brokerage says they are not involvedin door-to-door sales, and that full disclosurewas made. They also saythe clients were high risk, and so private mortgagewas the only option. But the regulatoris taking a much closer look at Centum Mortgage Smart. And the Centum brandis actually severing ties,.

Expressing distressover the situation. For most mortgage transactions, there's also a lawyer representing the borrower's interests. In Karl's case, the paperwork says that lawyer was Anant Jain. They were paid a substantialamount of money for– you know,for services that, uh, weren't actually performedor rendered properly.

Karl's current lawyer, Greg Weedon, believes it was the people behind the alleged scam who brought in this lawyer. The same peopleshow up at his door, they had a lawyeron the phone with them. It's pretty clear that ifyou're signing a 25% mortgage loan against your property, uh,you know, there would be some– some material questionsthat a lawyer would ask. And, in this case,that wasn't done.

Anant Jain is not involved in every case we're aware of, but is named in three other similar lawsuits, including Danila's. All allege professional negligence. [doorbell rings] He doesn't respond to our interview request, so we leave another at his office. His lawyer then tells us.

they're unable to comment on cases currently before the courts. In those lawsuits, Jain denies wrongdoing, saying his clients understood the documents and that he acted diligently and in good faith. Then there's the lender. Canada's Choice Investments isn't involved in every mortgage we've reviewed, but they are a lender for each of the people we've met..

And across Ontario, our digging reveals, of the 40 mortgages the lenders held in the last couple of years, more than half of those homeowners say they never sought a mortgage. And while they don't know who orchestrated the scheme, many believe Canada's Choice is involved. The company won't talk on camera, but denies all allegations.

and says they have no connection to any door-to-door scheme. They say the mortgages were signed voluntarily and all above board. Corporate records showthat a mailbox in there is their official address,inside a UPS Store. Well, in a statement,Canada's Choice tells us that they relyon borrowers' lawyers to representtheir clients' interests,.

And that all business comesto them from mortgage brokers. In fact, Canada's Choice argues they may be a victim ofa concerted group of seniors who are refusingto pay their loans back. They also saythat they're cooperating with a law enforcementinvestigation. But we still have questions. So, we're callingAnas Ayyoub, the sole directorof Canada's Choice.

Hello, Mr. Ayyoub. It's David Common from CBC Marketplace. I'm– I– It's the wrong time to call me. I can't speak right now, but can you– can you call my lawyer? You have– you have his info. I do, but we're just– We're trying to getto the bottom of why so many of your customerssay they have mortgages they– -[call ended beep]-Oh, well.

He's just gone and hung up. ♪ Meanwhile, in Stouffville, Ontario… [knocking] ♪ -Karen?-Yes. David? -Yes.-Hi. -Good to meet you. -It's nice to meet you as well.Yeah.

Karen Ogden intervened just in time to save her parents' house. Doing what police suggest– checking in with your loved ones. We are the lucky ones. We caught it in timebefore my parents tried to sell,or before somebody came and put a foreclosurenotice on the front door. Ultimately, a settlement.

ended what Karen believes should never have happened. Thankful that my mumstill has her house. Do you have a story you think Marketplace should investigate next? Tell us all about it on email, Twitter, and Facebook. ♪ [dynamic instrumental music] ♪ Five decades and still fighting for you..

Investigating the cost of living… I've been watching it.Go, go, go. $3 if I don't use it,that's a rip-off. We the people have the power! Our housing social safety netis broken. We're at a tipping point,so to speak. Why is it so–so expensive for women? Well, women pay morefor lots of stuff. That's for sure.

Aren't we, like,making less money than them? -Yep.-That's sick. Testing products and promises… Do you know whatthe four Cs are? He's gonna save almost $4,000over the course of two years. All of us can do this. That's not good. These are pretty dangeroushelmets to use. -It's a fake.-It is, it's a fake helmet.

[woman]That's a big shock. I don't think there'sany chihuahua in him. That right there is unethical. They're selling somethingthat isn't correct. Revealing what you can trust about what you've been told. Is it good for you? No. This is a sugar bomb,is what this is. -[woman] It says 34 here.-40-inch waist.

Are we surroundedby palm oil? We are in a hotbedof palm oil right here. – Okay.-[man] 14, 16. Most people would not imagine putting that much saltinto just one serving. That is mind-boggling. Why do you want peopleacross the country to see this? Could've been donesooner and it should have been. Exposing scams….

Are you worriedabout losing this house? -I worry, yeah. I worry, yeah.-None of this is real. The company doesn't even exist. There's nothinggrey area about it. It is absolutely fraud. Oh, they madeall kinds of excuses. It's massive elder abuse. We can shut cancer downin one treatment. Confronting the people behind the claims….

-People have died, spending—Please, go away. -large amounts of money-Go away. It's not true. How do your customers feelto hear these results? I think our customershave a lot of confidence in us. Sir, you have,uh, many people who allege thatyou've, uh, ripped them off. Do you have anythingto say to them at all? Getting the goods when you need to know. They're sayingthat you've done all.

Of these laundry listsof things. -It's not a laundry list—Then help this family. Is it a problem the waythat it's showing up? Is this the transparencyyou want? -No.-Do you feel like you're completely alone in this? I did beforeyou guys showed up. Our 50th season atMarketplace comes to an end, but our work continues..

So, if you have a story you think we should investigate, reach out, because this is your Marketplace.

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