Mortgage fraud is a word describing a broad variety of criminal activities with the intention to misrepresent or omit data on a mortgage loan application to obtain a loan or a huge loan amount. In the courts, it’s prosecuted as wire fraud, mail fraud, bank fraud and money laundering with up to thirty years imprisonment.
Because of the increasing fraud in the past few years, some states have also started to enact their own penalties for this crime. Here are some examples of a mortgage fraud:
Undisclosed kickbacks such as placing a deal with a seller to give you money or a check across the table to pay money for brand new roof and also the lender isn’t aware of it because it is not disclosed on the purchase contract; addendum or the estimate closing statement, then it is counted as a mortgage fraud.
If a borrower without a down payment borrows a down payment from the seller in exchange of giving a seller a silent second mortgage, which is not recorded and hidden from the mortgage lender.
Falsifying employment earnings by inflating their income above and beyond the W-2. In other words, intentionally making false entries on income received each month.
Down payment gifts you’ve got to repay. Both parties, the recipient and giver commit loan fraud if the gift is to be repaid since gifts can’t be repaid.
If you have two purchases and send the false contract with the higher price sales to the mortgage lender with the hope of acquiring a higher appraisal.
Some dishonest borrowers without an earnest money deposit can state in the contract that the deposit was paid outside of escrow.
Lying on your real estate loan application, even tiny things could constitute a fraud. Nevertheless, many borrowers a hedge a little here and there usually because they do not know better or maybe even worse, since the real estate personel recommended the idea.
If a real estate person will approach you and ask you to be a part of a mortgage fraud scheme, and if you suspect any mortgage fraud, be sure to report it to the FBI immediately. Remember that if a deal that sounds too good to be true is possibly a scam.
Furthermore, be aware that a mortgage fraud is a prosecutable crime and is against the law. If you have the suspicion that you’re being asked to be a part of it or encouraged to break the law, talk to a reputable real estate attorney or the licensing authority in your state before you move forward with your plans.
Bear in mind that mortgage fraud is a growing crime rate that’s threatening to hurt land owners, businesses and also the economy as well. Protect your home and its equity and avoid falling victim to fraudulent activities by identifying and knowing the signs of mortgage fraud. Be sure to know how to report fraud to your state or the federal authorities so that they can stop scam artists from preying on innocent people.
Another great article by Johnson David B Real Estate, Re/Max of Wasilla Unique version for reprint here: What You Need To Know About Mortgage Fraud.
Related posts:
- Beware Of Mortgage Fraud Scams
- Finding Out The Best Mortgage That Works
- Tips On Obtaining The Best Mortgage
- Pay No Closing Cost To Refinance Mortgage
- Is A Fixed-Rate Mortgage (FRM) Or Variable-Rate Mortgage (VRM) Best For You
- When You Need A New Home Massachusetts Mortgage Loans Are Available
- Keeping Your Home And Avoiding Foreclosures
- How To Utilize Seller Financing To Get Passive Income
- Home Equity Loan & Line Of Credit: Know Which One Is Right For You
- Real Estate Short Sale Information
Tags: business, finance, Home, House, Houses, investing, Real Estate, Unsorted, Various