Commercial Property
Are You Educated About Mortgage Loan Fraud?
According to broker Ralph Roberts, one in four mortgage loan transactions is fraudulent. Are you guilty? Don"t be. It"s a matter of time before the FBI makes an example of real estate agents who participate in loan fraud. Roberts says that mortgage loan fraud has grown way beyond the little white lies told by the borrower to inflate his/her income to qualify, or agents and lenders cajoling appraisers into meeting the listing price of homes for sale. In the May, 2005 FBI Financial Report to the Public, the FBI defined fraudulent mortgage loan activity in the following ways: Property flipping: Property is quickly resold at an inflated price, typically through inflated appraisals and/or doctored loan documents, including falsification of buyer income. Lending proceeds are often used to pay kickbacks to buyers, investors, property/loan brokers and appraisers and title company employees. Silent second: The buyer borrows the down-payment from the seller through a nondisclosed second mortgage, which may not even be recorded. The primary lender believes the borrower has invested his or her own money. Nominee loans/straw buyers: The identity of the borrower is concealed through the use of another person"s identity for the purpose of hiding an applicant"s name and credit history when applying for a loan. Fictitious or stolen identity: May be used on a loan application. Inflated appraisals: An appraiser acts in collusion with a borrower and provides misleading appraisals to the lender. Foreclosure schemes: Homeowners at risk of defaulting or whose houses are already in foreclosure may be solicited to transfer the deed to their home, believing they can save their home. The perpetrator profits by re-mortgaging the property or pocketing fees paid by the homeowner. Equity skimming: False credit reports and income documents are used to secure loans to purchase property, then the buyer signs the property over to an investor in a quitclaim deed, relinquishing rights to the property and providing no guaranty to title. The investor does not make mortgage payments and rents the property until a foreclosure suit is brought several months later. Tips agents may want to pass along to their buyers and sellers include the FBI"s Financial Crimes Report to the Public: Get referrals from real-estate and mortgage professionals, and check the licenses of industry professionals with state regulators. Be wary of unsolicited contacts and high-pressure sales tactics. A promise of extraordinary profit in a short period signals a problem. Check out recent comparable sales of property in the area where you are buying, and other documents, such as tax assessments, to verify the value of the property. Review the title history to determine if the property has been sold multiple times within a short period, which could indicate that values were falsely inflated. Know and understand terms of your mortgage and check that information against information in other loan documents. Never sign loan documents that contain blanks. And last but not least, if a deal seems too good to be true, it probably is.QuickQuid commented:
Alerting post it is. I will recommend it to everyone who wants safety in such property transactions.Thanks for such post.
08.11.2011