Avoid Being a Victim of Mortgage Fraud
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What Is Mortgage Fraud?
According to the FBI, mortgage loan fraud is one of the fastest growing white collar crimes in the United States. Mortgage fraud often takes the form of a borrower providing false information in order to qualify for a loan. However, an increasing number of mortgage fraud cases involve scams against homebuyers.
How Is Mortgage Fraud Perpetrated Against Homebuyers?
Most cases of mortgage loan fraud against homebuyers involve inflating the value of a property for more than its actual worth. When the buyer unknowingly pays this higher price and takes out a mortgage in this amount, the scammer profits. First time buyers who are unfamiliar with the process of purchasing a home are often victims of these mortgage frauds.
Mortgage Fraud Red Flags
Since the scammers in these cases are often in the real estate industry and may appear to be reliable, recognizing a scam can be very difficult. However, there are some red flags you can watch out for:
- Be wary if a broker insists that you use a specific lender
- Inquire further if a lender pressures you to borrow more than you can afford
- You should always receive copies of every loan document – if you do not receive this paperwork, it could be a sign that something is wrong
How Can I Avoid Mortgage Fraud?
In addition to the red flags above, never purchase a property without actually seeing it yourself. The FBI’s website is full of pictures of homes used in mortgage fraud which have beautiful fronts with completely gutted backsides. Also, it is worth your while to hire an independent appraiser to determine the true value of the property.
Should I Consult an Attorney for Mortgage Fraud?
If you are worried that you are the victim of mortgage fraud, you should seek out the services of a lawyer. An experienced real estate attorney can review your situation, advise you of any potential problems, and take action if necessary.
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Last Modified: 02-12-2014 10:26 AM PST
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