Blog

Can a Co-Signer Be Convicted of Mortgage Fraud?

Posted on May 30, 2025

co-sign mortgage fraud

When a person cannot qualify for a mortgage on their own, often due to low income, insufficient credit history, or a high debt-to-income ratio, they may ask someone to co-sign the loan. A co-signer is typically a family member or trusted friend who agrees to take on legal responsibility for the mortgage if the borrower fails to make payments. While this arrangement can be beneficial for buyers looking to enter the housing market, it also entails significant legal responsibilities. In some situations, a co-signer can be implicated in mortgage fraud even if they did not directly benefit from the loan. If you have been charged with mortgage fraud as a co-signer of the loan, book a lawyer consultation for personalized legal advice from our expert criminal defence lawyers at Karrass Law. Our team is equipped with reputable and experienced criminal fraud lawyers who can help protect your personal interest, from your reputation to your finances. 

When is Mortgage Fraud?

Mortgage fraud occurs when a borrower intentionally misrepresents information on their mortgage application, thereby misleading the lender into approving a loan that would otherwise not have been approved by the bank or financial institution. Common examples include inflating income, hiding debt, or claiming a property will be owner-occupied when it is rented.

Mortgage fraud can have profound implications for those charged criminally or named in a civil fraud lawsuit. While borrowers often commit this type of fraud, co-signers can also be caught in the legal crossfire. If you've found yourself involved, whether as a co-signer or not, a trusted fraud lawyer can provide practical and actionable legal advice and guidance. 

Can a Co-Signer Be Convicted?

A co-signer on a fraudulent loan application can be convicted of mortgage fraud if it can be proven that they participated in or were aware of the fraudulent activity. Canadian courts will look at intent and knowledge. If a co-signer claims they did not know the application was fraudulent, they may still be investigated to determine what they knew regarding it fraud and when they knew it.

A criminal fraud lawyer can assess the evidence and develop a defence strategy based on your individual level of involvement and knowledge. To ensure the best path forward, book a consultation for legal advice with our fraud lawyers near you at Karrass Law. 

Legal Consequences of a Mortgage Fraud Conviction in Ontario

Mortgage fraud is a serious criminal offence in Ontario, carrying significant legal and financial consequences. Whether the fraud is committed intentionally or through negligence, individuals found guilty can face severe penalties under both federal and provincial laws. 

Under Section 380 of the Criminal Code of Canada, fraud involving amounts over $5,000 is classified as an indictable offence, punishable by up to 14 years in prison. For fraud under $5,000, the maximum penalty is two years' imprisonment. Additionally, in cases where the fraud exceeds $1 million, a mandatory minimum sentence of two years applies.

Beyond imprisonment, courts may impose fines and restitution orders, requiring offenders to repay victims for their losses. To ensure you get the possible outcome for your situation if you are charged with mortgage fraud in Ontario, work with experienced fraud lawyers and defence lawyers at Karrass Law. 

Get Legal Expertise In Regard to Mortgage Fraud with Lawyers at Karrass Law

Being a co-signer on a fraudulent mortgage application can get tricky quickly. A knowledgeable criminal fraud lawyer can help navigate complex allegations, negotiate with prosecutors, or even resolve the matter without a formal charge being laid, depending on the situation. To ensure you navigate the process smoothly, work with our skilled criminal defence lawyers at Karrass Law. 

Contact us today.

Please, enter a valid value

Call Us (416) 477-6022