Mortgage Fraud: Avoid Being a Victim

On January 25, 2008 by Lauren

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Is there somebody involved in your mortgage who asked you to do something that seems suspicious? It could be just nothing, or it could be loan fraud. Loan fraud or mortgage fraud is defined as a misrepresentation or omission relied by a lender to obtain a loan. To avoid becoming a victim of fraud, watch out for these instances of mortgage fraud.

Altering employment income. It’s difficult to determine the income of self-employed individuals, but there are some employed borrowers who inflate their income.

Undisclosed kickbacks. This occurs when you make a deal with a home seller to give you a certain amount of money without the lender knowing because you failed to include it in the purchase contract.

Inflated purchase price. It’s mortgage fraud if you have two purchase contracts and give one to with the higher price to the lender, in the hopes of getting a higher appraisal.

Claiming occupancy. Lenders usually offer less favorable terms to buyers who do not intend to live in the property because the lender has a lot more to lose.

Remember – if it sounds too good to be true, it’s probably a scam. Remember that mortgage fraud is a crime and you can get prosecuted for it. When in doubt, consult a real estate lawyer before moving on with your plans.

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