TORONTO – Scotiabank is defending its income verification practices in light of a report that says Canadian banks allow foreign borrowers to qualify for mortgages without having to prove the source of their income.

A Globe and Mail report Wednesday said that Scotiabank’s (TSX:BNS) internal guidelines don’t require its loan officers to verify foreign clients’ income sources if the down payment on a property is at least 50 per cent.

Scotiabank spokeswoman Diane Flanagan said the bank regularly makes exceptions to accommodate clients who can’t provide standard documentation, such as Canadian tax returns and pay stubs, to verify their income.

Certain types of borrowers — such as non-residents, self-employed people and new Canadians — simply don’t have those documents, Flanagan said.

“We look at exceptions on a regular basis, because there aren’t one-size-fits-all policies for everybody,” Flanagan said.

The bank still verifies the source of the money being used to fund the purchase and that the borrower is able to service the mortgage, she said.

In many cases, the due diligence required for those who can’t provide standard documentation is even more rigorous, she added.

“It is entirely inaccurate to suggest there is preferential treatment” for foreign borrowers, Flanagan said.