Mortgage Fraud: Protecting Yourself in the Homebuying Process
Mortgage fraud is a serious issue. Learn how to protect yourself in the homebuying process from becoming a victim of fraud. Tips and best practices for preventing mortgage fraud are explained in this article.
What Is Mortgage Fraud?
Mortgage fraud is a term used to describe any deceptive activity related to the purchase of a home. This type of fraud can involve fraudsters attempting to get a loan approved by providing false information, using stolen identities, or simply lying on an application. Mortgage fraud also includes any illegal activities related to the re-sale of a home or securing a loan for a property sale.
Common Types of Mortgage Fraud
The most common types of mortgage fraud include:
- Property Flipping: This is when a property is purchased with the intention of quickly reselling it for a profit.
- Equity Stealing: This is when an individual or company takes out a loan using someone else's property as collateral.
- Foreclosure Rescue Scams: This is when an individual or organization deceives the homeowner and attempts to obtain ownership of the home.
- Identity Theft: This is when a person steals an individual's identity and uses it to secure a loan.
Protect Yourself from Mortgage Fraud
If you're looking to purchase a home, it's important to be aware of any potential mortgage fraud. There are a few steps you can take to protect yourself:
- Do your research. Research the property you're considering to make sure there are no liens or other legal issues. Also research the person or company selling the home to ensure they are reputable.
- Get pre-qualified. Get pre-qualified for a mortgage to ensure you are able to purchase the home. Work with a lender you trust.
- Hire a real estate agent. A qualified real estate agent is knowledgeable and can help protect you from potential scams.
- Verify documents. Request and verify all documents related to the sale. Make sure all documents are valid and in order.
- Sign a contract. Before signing any documents, make sure you understand all the terms and commit to them in writing.
By taking the necessary precautions, you can protect yourself from any potential mortgage fraud in the home purchasing process. It's important to be diligent and aware of any red flags or potential fraudulent activities.