Types of Mortgage Fraud
What should you look out for?
The different types of mortgage fraud are intensifying at an an
alarming rate. Con artists oftentimes target homeowners struggling
to meet their mortgage loan responsibilities or are anxious to sell
their homes.
There is help available when facing financial troubles or
foreclosure, but make sure you are dealing with a honorable
organization before getting involved. To protect your home and
equity and avoid falling dupe to fraudulent schemes, realize and
understand the signals of mortgage fraud. Know how to report fraud
to federal and state authorities so they can help prevent scam
artists from preying on innocent future and current homeowners.
Begin by studying the motivations behind mortgage scams. They are
generally categorized into 1 of 2 categories:
- Fraud for property or housing
- Fraud for profit
Fraud for housing, generally comes about when a borrower wants to
buy a piece of property they recognize they cannot afford. Borrowers
are frequently aided by deceptive mortgage industry pros who submit
or encourage the submission of false information about the borrowers
work history, income or assets in order to qualify for the mortgage
loan.
Borrowers are oftentimes influenced to partake in this type of
fraud by a powerful desire for becoming a homeowner and the
impression that no one will see the fraudulent data. Nevertheless,
banks detect fraud for property scams by thoroughly reexamining and
verifying documents and keeping diligent records. It is a federal
crime to lie in connection with the loan application and these
individuals may be at risk of criminal prosecution.
Fraud for benefit schemes oftentimes involve a group of
individuals who scam a prospective homebuyer or lender. For
instance, a deceitful mortgage loan officer can partner with a
mortgage loan processor to produce a fictional credit profile, and
with an appraiser to inflate the homes value. There's also people
called, "straw borrowers," who incorrectly represent themselves,
just might be lured to take part through the promise of fiscal gain.
Fraud for profit scams are also irresistible to criminal
enterprises tempted by the opportunity for larger profits, less
risks than those normally associated with violent crime, and
decreased sentencing or jail time.
If you are facing financial difficulties that are making it tough
to pay your mortgage, or if you get the feeling you might be falling
prey to a fraudulent scheme, the optimal solution is to speak to
your mortgage lender or a reputable counselor they should be
up-to-date on all the current types of mortgage fraud going on in
your area. Also, be suspicious of individuals who guarantee to
rescue you from financial trouble or possible foreclosure.