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"Fake Chinese income" mortgages fuel Toronto real estate bubble: HSBC bank leaks

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Re: "Fake Chinese income" mortgages fuel Toronto real estate bubble: HSBC bank leaks

#101

Post by huhtenberg »

maxglute wrote: post #21

>The whistleblower, whomThe Bureau is calling D.M., immigrated to Canada as an international student from India, making him a minority among mostly Chinese-Canadian co-workers at the Aurora branch. I mean it's real Chinese income backed by fake paperwork. There's PRC capital controls, rich PRC national who buy RE abroad are going to do it via laundering services and has been for decade+. Banks are fine with this and…

> has been for decade+

Try 25 years. Started right after the Hong Kong transition from under the British rule.

Re: "Fake Chinese income" mortgages fuel Toronto real estate bubble: HSBC bank leaks

#102

Post by maxglute »

jabbany wrote: post #98
seanmcdirmid wrote: post #68

Earlier quoted context omitted.

Ya, foreign nationals are allowed to export their earnings. But even Chinese citizens can also pool those $50k yearly allocations, it doesn’t take a lot of friends and family to do that. I’m not really sure what is happening among the rich, but among the middle class, it isn’t so much money laundering but having lots of savings with no good investment options, or just wanting to make money while someone else takes on…

> But even Chinese citizens can also pool those $50k yearly allocations, it doesn’t take a lot of friends and family to do that. So as an observer of this, you will see money coming out of one place, spread to many accounts, wired overseas to different recipients, then re-aggregated... What do you think that looks like...? Surely not money laundering?

Not on Canada's end, it's a bunch of people using legal capital controls to get money into Canada. On PRC end, it's evading capital controls, which depending on your geopolitical alignment, can be illegal activity. But if you're in the west, you want that Chinese money. Free money from competitotrs as good as brain drain from competitors.

Re: "Fake Chinese income" mortgages fuel Toronto real estate bubble: HSBC bank leaks

#103

Post by silent_cal »

SunlightEdge wrote: post #100

To maybe offer a different perspective: I think the Canadian mortgages linked to Chinese accounts will likely all be paid. What may be happening is that there is a lot of underground chinese financial activity that is not recorded in Canada and part of this 'network' is utilized to get money out of china.

It's still fraud

Re: "Fake Chinese income" mortgages fuel Toronto real estate bubble: HSBC bank leaks

#104

Post by fallat »

wisemang wrote: post #69
fakedang wrote: post #59

Earlier quoted context omitted.

Lol no. HSBC has always had a much worse reputation than RBC, or any other bank for that matter. HSBC and Standard Chartered are amongst the worst international offenders when it comes to fraud and money laundering.

Probably referring to the fact RBC is set to acquire HSBC’s Canadian business.

Brings to question: did RBC know? How did they not know?

Re: "Fake Chinese income" mortgages fuel Toronto real estate bubble: HSBC bank leaks

#105

Post by beiller »

ABCLAW wrote: post #86
beiller wrote: post #62

All sounds very plausible, but where are the effects of this? We should be seeing many people holding mortgages at HSBC not able to pay. Are there no public stats showing how many lack of payments being made to HSBC? Is HSBC going to hold on to these properties taking massive losses? For how long? It has definitely helped the run up of prices here. It will also help the collapse of prices as well, either that or the…

> We should be seeing many people holding mortgages at HSBC not able to pay. Not really. Lying about the source of cashflow doesn't mean the cashflow isn't real. The end objective for a lot of these frauds isn't to sink the bank with fake loans. It's to launder money.

Makes sense I wasn't thinking about the full on laundering aspects. But even so, if the real estate is used in laundering, it will eventually have to be sold to get back clean money. This should still run up prices at the start, and run them down in the end. So I think the majority of the point still stands: there should be an uptick in sales (which there is not). They could be speculating on top of laundering, in which case they are taking some losses. We are -20% from peak. The time will come when they (the launderers) will need liquidity and sell which has not come. Will it ever come?

Re: "Fake Chinese income" mortgages fuel Toronto real estate bubble: HSBC bank leaks

#106

Post by jabbany »

silent_cal wrote: post #103
SunlightEdge wrote: post #100

To maybe offer a different perspective: I think the Canadian mortgages linked to Chinese accounts will likely all be paid. What may be happening is that there is a lot of underground chinese financial activity that is not recorded in Canada and part of this 'network' is utilized to get money out of china.

It's still fraud

You can label it however you want, if both the lender and borrower are willing participants, it will be difficult to prevent this from happening.

Like mentioned in the article, often times the material is very obviously suspicious and banks probably know this and still turn a blind eye to it because these borrowers are low risk and much less sensitive to the high/rising interest rates of today...

Re: "Fake Chinese income" mortgages fuel Toronto real estate bubble: HSBC bank leaks

#107

Post by peterleiser »

fakedang wrote: post #59
inSenCite wrote: post #10

HSBC soon to be RBC. This is not very surprising, a lot of this also gets facilitated by the independent mortgage brokers who get ppl through the system with some 'creative coaching'.

Lol no. HSBC has always had a much worse reputation than RBC, or any other bank for that matter. HSBC and Standard Chartered are amongst the worst international offenders when it comes to fraud and money laundering.

Exactly. HSBC was laundering money for Mexican and Colombian drug cartels and fined $1.9 billion by the US government, which is one of the largest penalties ever imposed on a bank for breaking U.S. law.

Deutsche Bank fires pretty high on the fraud meter as well.

Re: "Fake Chinese income" mortgages fuel Toronto real estate bubble: HSBC bank leaks

#108

Post by ilrwbwrkhv »

I have said this over and over again: Canada is the most overrated of all the developed countries.

The whole country is a gigantic house of cards propped up by real estate, with horrible service quality, terrible healthcare, no jobs, ZERO innovation, risk taking and entrepreneurship.

Having lived and travelled extensively, most Canadians want a house somewhere in the woods instead of doing something meaningful with their lives or try and innovate to build something.

All of this is propped up by rampant levels of immigration from China and India. Where US got the best talent from India, Canada got the worst, the ones who scam their way here and take the lowest level jobs.

Now all of this is coming home to roost. The next decade will be Canada's worst and if they do not learn that risk taking and entrepreneurship is the only way out of the mess they find themselves in, they will become a third world country in another decade.

Re: "Fake Chinese income" mortgages fuel Toronto real estate bubble: HSBC bank leaks

#109

Post by denton-scratch »

function_seven wrote: post #57
alchemist1e9 wrote: post #36

Earlier quoted context omitted.

Blaming foreign investors for a housing crisis is a smokescreen. It's not the demand from investors that's the issue; it's the government's stifling regulations that choke new construction. The mess is because of state failure, not market failure. When sellers freely sell their homes to foreign buyers, they're making choices that benefit them. Why should we deny them that right? The real absurdity is ignoring the ele…

Yup. The Power of Pricing is a thing that exists whether you want it to or not. Smart policy uses it to great advantage. Dumb policy redirects this to hurt those it intends to help. Rent control, restrictions on production, byzantine zoning and construction rules... all contribute to distorting the market in ways that push back on the original (or at least, stated) intentions. You want housing to be cheaper? Increase…

> You want housing to be cheaper? Increase supply.

The USA (and maybe Canada) has large stocks of government land. In my country, most land is privately-owned; interfering with landowners' property rights is seriously destabilising. Property law is the basis of most law.

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