Mortgage frauds, scams and how to avoid them
Mortgage frauds or scams are getting quite common these days. And it does not involve borrowers alone. But they are assisted by loan officers who originate mortgages, real estate agent, brokers, title company, attorneys and multiple parties involved in a home-buying or mortgage transaction. Most of the victims of fraud are first time buyers and homeowners who are having problems in paying down their mortgage or those facing foreclosures.
What are the types of mortgage frauds?
There are in general 2 types of mortgage fraud – fraud for property and fraud for profit.
Fraud for property:
Fraud for property or housing occurs when dishonest lenders encourage borrowers in buying houses which they cannot afford. These lenders encourage borrowers to submit false information about a borrower’s employment, income or assets so that he gets qualified for the loan. This is in fact a federal crime and individuals involved may be at risk if the law finds them guilty.
Fraud for profit:
This kind of a fraud involves a group of people who defraud not only home-buyers but also mortgage lenders. For instance, a dishonest broker may tie up with a loan processor and create fictitious credit profile and get together with an appraiser to inflate borrowers’ property value. Then there are the straw buyers who represent themselves with false information and thereby get involved in defrauding lenders.
Of all mortgage frauds, foreclosure rescue scams and illegal property flipping are the most common frauds being reported nowadays.
How can you avoid mortgage fraud?
If you think you’re falling prey to any kind of fraud, the best thing is to talk to your lender or a housing counselor. Also, avoid dealing with scam artists who promise to help you save your homes from being foreclosed.
Where should you report for fraud?
If you suspect that you’re a fraud victim, call up the Mortgage Fraud Hot line 1-800-4Fraud8 (1080-437-2838). You can also contact the State Attorney General’s office and file a complaint there.
To keep you informed about various frauds and scams taking place in the industry and to help you avoid such frauds or get rid of them, here’s a list of resources for your knowledge and information.
Spotting Fake Loan Fixers
Ask for Mortgage help but stay away from foreclosure fraud
What is foreclosure rescue scam and how to avoid it?
Mortgage Servicing Scams to watch out for
Top 4 Reverse Mortgage Scams to watch out for
What is foreclosure rescue scam and how to avoid it
The Truth About IVA
Why mortgage frauds are on the rise
FBI arrests Real Estate Brokers in Mortgage Fraud case
Mortgage Servicing Scams to watch out for when your loan is sold off
Mortgage broker sentenced for mobile home fraud
Choose The Right Loan
Arrests in Scams combining ID theft and Mortgage Fraud
Florida to take action against criminals in mortgage industry
Missouri not an exception to mortgage fraud
Scammers steal Countrywide customer information
Home Purchase Scam – Credit union to help fraud victims
Top 4 reverse mortgage scams to watch out for
Top 3 Refinance Scams to stay away from
Quit Claim Deed Fraud – Does the mortgage industry help in any way?
Mortgage fraud activity drops nationwide
Mortgage Frauds get sophisticated amidst economic crisis
Predatory Lending: The abusive practice and ways to avoid it
Ways to prevent identity theft
Adjustable Rate Mortgage Loan: Ways to avoid scams
VA mortgage loans: Scams to avoid
Mortgage Fraud in San Diego: Some Basic Facts
Subprime Mortgage Crisis
Ways Of Preventing Identity Theft
BNC Mortgage Fraud and Forged Loan Documents
Federal Statute of Limitation on Mortgage Fraud
Mortgage Broker Fraud
Mortgage Fraud and Oregon
How to Identify Predatory Lending?
Mortgage Fraud Jobs
Mortgage Fund Investment Fraud
Majestic Mortgage and Mortgage Fraud
Emerging trends in mortgage fraud
FBI had sensed an epidemic mortgage fraud
Loan modification fraud and how to combat it
Mortgage fraud- avoid being ripped off