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How to avoid mortgage fraud |
| By Pat Curry • Bankrate.com |
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Mortgage fraud is running rampant across the U.S.,
posing potential financial damage or ruin to homeowners and even
the local community.
The FBI has reported that the illegal activity can
have a domino effect on the local housing market and the economy
at large.
Here are some tips for recognizing and preventing
mortgage fraud:
For sellersGet
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.Read
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 blank.Do not agree to a price 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.
Be wary of offers to "save" you from foreclosure.
You may pay thousands of dollars in fees without reducing or eliminating
your debt, and you could even end up losing your home. Work with
your lender instead, and insist on getting a complete set of the
closing documents.
For buyers
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 he or she offers to pay
you for using it.
Read and understand everything you are asked to sign,
and talk to an attorney (that you have chosen) if you need to have
something explained.
Do not sign any documents with information left blank or that
contains 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 loan.Insist
on getting a complete set of the closing documents.
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