Ten Tips To Avoid Becoming a Victim of Mortgage Fraud

Posted by Pamela S. on Wednesday, September 26th, 2012

Buy a house and keep a house. Mortgage fraud isn’t going away anytime soon. The FBI and federal authorities have made mortgage fraud a priority. That doesn’t mean you won’t get scammed. Whether you are buying or selling, you need to be proactive and

watch for the signs of fraud.

 

The Lexis Nexis Risk Solutions 2012 Mortgage Fraud Report shows that this type of fraud is still growing in the U.S. According to the report, “Current investigations and widespread reporting indicate a high percentage of mortgage fraud involves collusion by industry insiders, such as bank officers, appraisers, mortgage brokers, attorneys, loan originators and other professionals engaged in the industry.” There is also an increase in collusion between buyers and sellers.

How can you protect yourself from becoming a victim?

1. Keep on top of the latest news regarding mortgage fraud on the FBI’s website.

2. Get referrals from people you trust for real estate

agents and mortgage brokers when you are selling or buying a home. Check out their licenses with your local regulatory agency. You can often do this online, or make a phone call. Be even more vigilant if you are purchasing a vacation property in a foreign country. Mortgage fraud isn’t just an American crime.

3. If it sounds too good to be true, it is. Don’t trust anyone who tells you otherwise.

4. Research the statistics for other homes in the area where you are buying or selling, and check the tax assessments. This will give you a good idea of what houses are selling for.

5. Don’t buy a house you can’t afford, even if someone tells you that you can buy a house for “no money down” or a low down payment.

6. Never make false statements on a mortgage application, such as lying about your income. This will only come back to bite you. Some real estate agents or brokers will tell you that it is OK to fudge the numbers. They just want to make a sale.

7. Read the fine print. Better yet, have a reputable lawyer read the documents. Never sign a blank document.

8. Secure your deposit and make sure a realtor or lawyer is holding your money in trust until closing.

9. Private sales allow you to sell or buy a house without paying commissions and other fees, however there is a reason that real estate agents are the professionals. They know the legalities, and a reputable agent will ensure that everything is on the up and up.

10. If you sense that you can’t trust the deal, or the people you are working with, or suspect you may be a victim of mortgage fraud, contact a private investigator. Sheer Investigations specializes in mortgage fraud investigations. If you know you have been victimized, contact authorities.

Former FBI Assistant Director Tom Sheer has recruited the best from the FBI, DEA, IRS and Secret Service to build a formidable team at Sheer Investigations. Our private investigators have the sensitivity and experience to handle the most delicate investigations.