How to avoid mortgage fraud
fraud is running rampant across the U.S., posing potential financial damage or
ruin to homeowners and even the local community. The FBI reports that the illegal
activity can have a domino effect on the local housing market and the economy
Here are some tips for recognizing and
preventing mortgage fraud:
- Get references for real estate and mortgage professionals -- and check them.
Make sure they're licensed with the state, county or city.
- Be cautious
about selling your property, especially if it's not currently on the market.
and understand everything you're asked to sign, and talk to an attorney if you
need something explained.
- Don't sign any documents with information left
- Do not agree to an amount above your asking price, especially if
you are asked to refund the difference after the closing or if the extra money
is to be used for repairs or improvements that you know are unnecessary.
wary of offers to "save" you from foreclosure. You may pay thousands
of dollars in fees without reducing or eliminating your debt and could even end
up losing your home. Work with your lender instead, and insist on getting a complete
set of the closing documents.
- Be extremely wary of "no money down/cash
back at closing" investment opportunities.
- Do your homework. Check the sales history
of the property -- several sales within a
short period of time could indicate inflated
values -- and have your own real estate agent
or appraiser establish the value.
- Check with your local tax assessment office
or recorder of deeds to make sure the seller
really owns the property.
- Do not let someone else use your name or
Social Security number to buy a property,
especially if they offer to pay you for using
- Read and understand everything you are asked
to sign, and talk to an attorney you have
chosen if you need something explained.
- Do not sign any documents with information
left blank or that contain inaccurate information,
such as overstated income, source of your
down payment, incorrect sales price, nature
or length of your employment, intent to occupy
the property as your primary residence, etc.
- Deal directly with the lender or the mortgage
broker. Do not let a third party arrange your
- Insist on getting a complete set of the