Buying a house is a tremendous step towards independence and self-reliance. However, for the inexperienced, taking out a mortgage loan can be confusing and scary. Scammers are ready to prey on the unprepared, so it’s important to know what mortgage fraud is and how you can avoid it.
What Is Mortgage Fraud?
Mortgage fraud is a crime that occurs when incorrect information is given or misrepresented between a borrower, seller, or lender of a mortgage loan with the intention of gaining money at the expense of the other party. It can be scary to think that predators are willing to go after your most sensitive information, but that makes it all the more important to educate yourself on the types of mortgage fraud, and to get to know the process of applying for a loan before you sign anything.
Types of Mortgage Fraud
There are many different activities that can be categorized as mortgage fraud. For example, a potential borrower can knowingly omit information from their mortgage application, inflate the appraisal of their property or belongings in order to get more money than they are worth, or pose as another person (living or deceased) in order to get a loan in their name. Likewise, a lender can deceive a borrower into thinking that they are a legitimate company to get their financial or personal information and then turn around and take all of the borrower’s hard-earned money without ever giving them the loan they applied for.
How to Avoid Mortgage Fraud
The best protection against any kind of mortgage fraud is preparation and knowledge. Before you make a deal with any lender, be sure to do some research into their history (such as when they were established) and read reviews from other borrowers, whether they are a personal homeowner or a business owner. The Federal Bureau of Investigation (FBI) investigates cases of mortgage fraud, and information about these cases may appear on news platforms on a state or national level. Selecting a lender who is consistent, attentive and dependable is essential to ensuring you will be taken care of.
Luckily, you don’t have to feel alone while you learn about and apply for a mortgage loan. Homeland Lending offers advice on protecting you and your loved ones from the dangers of mortgage fraud, as well as advice on ensuring your personal and financial well being. Learn more about Homeland Lending or reach out if you need help with your mortgage loan (or just want to ask a question). We want to help you make a successful home purchase.