Humber/Ontario Real Estate Course 4 Exam 2025 – 400 Free Practice Questions to Pass the Exam

A significant deviation in the sale price from the current market value is indeed a notable red flag for potential mortgage fraud. This discrepancy often raises suspicion because it may indicate that the seller and buyer are attempting to manipulate the property's value for financial gain. For instance, if a property is sold for considerably more than what similar properties in the area are going for, it might suggest that the parties involved are trying to deceive lenders by inflating the property's value to secure a larger loan than what would be justified by an accurate appraisal. This sort of activity not only poses risks to financial institutions but can also result in legal repercussions for those involved.

In contrast, the other options do not inherently suggest fraudulent activity. A mortgage rate being the lowest in the market could indicate a competitive lender rather than fraud. Having multiple mortgages on a property is common; many homeowners refinance or take out additional financing without engaging in fraud. Likewise, immediate possession might reflect the seller's circumstances rather than fraudulent intent, while the involvement of a first-time buyer does not imply fraud either. The use of an unlicensed appraiser is also concerning and should be addressed, but it is the disparity in sale price against market value that is most directly linked to potential fraudulent activities.