Understanding Mortgage Home Loans
Some people say that mortgage loan frauds are something that you shouldn’t worry too much, but this is wrong. Even lying on your application is already a mortgage fraud perhaps because you don’t know that much and it seems that you doubt about being approved on your Crosby TX mortgage loan application.
Mortgage fraud is defined by FBI as “any material misstatement, misrepresentation or omission relied upon by an underwriter or lender to fund, purchase or insure a loan.” Some call this mortgage fraud ‘creative financing’ because the individual ‘customizes’ some information on the application or real estate document. This so-called ‘creative financing’ actually started in the 1970s. Even during these times, lenders would normally fine a six-figure amount or the whole loan and even imprisonment to borrowers that falsify the information on their applications.
Mortgage fraud varies in activities. An individual who claims a property that s/he actually doesn’t have is one example of a fraud activity that is very common in mortgage loan applications. Another example is when an individual gives an inflated appraisal in order to obtain a mortgage for more than Real Estate in Decatur IL is actually worth. Third example would be when an individual pretends to be the borrower in behalf of the person who is actually buying the property. An individual pretends to provide financial help to a financially stressed homeowner in order to skim off equity from the property.
Because mortgage fraud refers to many activities done by buyers, sellers, agents, and even mortgage lenders themselves, here are some of the mortgage fraud red flags as mentioned in Fannie Mae’s Mortgage Fraud Overview (2007):
1. Loan participants/Motivations
2. Information discrepancies
3. SSN discrepancies
4. Document discrepancies
5. Undisclosed Mortgages
Red flags given by Fannie Mae on this report was further broke down into Loan application, Credit Report, Employment and Income Verification and Appraisal. So if you are specifically involved in any real estate transactions, it is wise to be informed with these red flags so you can guard yourself as well as your investment and cash. So, it is wise to be informed with these red flags so you can guard yourself as well as your investment and cash especially if you are involved in any real estate transactions, and Fannie Mae suggests that you know the people with whom you do business with, educate yourself with the common mortgage schemes, ensure that every document is accurate, and report any suspicious mortgage fraud activity that you know.
Tatyana Shafir