In 2010, there was over $1.5 billion worth of mortgage fraud loses in the United States. You’re excited to finally become a homeowner, but you don’t want to become a statistic. If you’re not careful, your happy home-buying experience could turn into a major nightmare. Let’s face it, most of us don’t need the hassle, headache, and heartache. Before you sign on the dotted line, here are eight tips to keep in mind in order to avoid becoming a victim of mortgage fraud.
Mortgage Fraud – Dos and Don’ts
Read all the paperwork
Always read paperwork before you sign it, especially when you’re dealing with something as important as a mortgage. You never know what you could be signing your name on, even if the first page looks legit. Take your time and read through everything, even if it means bringing it home and taking a few days to review it. It’s always best to be as thorough as possible.
Don’t give personal information to an unauthorized person
When you’re applying for a mortgage, there are only two people you should ever deal with: the mortgage broker or the lender. When a third party comes in and asks for personal information, it could be a good indication that something isn’t right. The third party might either have nothing to do with the lender or they might have an affiliation and are trying something shady.
Don’t believe guarantees
When a company guarantees your loan can get modified or that they can stop your foreclosure from happening, it’s a sign of possible mortgage fraud. There are no such things as guarantees, especially in the early stages of the mortgage process. Until the process has been thoroughly completed, everything has been reviewed on your side and theirs, can you finally be given a guarantee.
Don’t pay fees up front
Never hand over money before you’ve received services. In certain states, such as California, it’s illegal for foreclosure consultants to collect any fees from you until after services are performed. Make sure to check what the law is in your state before someone tells you that you’re required to hand them a check up front.
Get explanations for what you don’t understand
If you have any questions or you want information verified, don’t hesitate to take the paperwork to a lawyer or your accountant. No one should ever force you to move forward with the mortgage process, especially if you don’t fully understand what’s going on. Reputable businesses and individuals will do what they can to help you understand everything and let you take all the time you need.
Don’t be talked into giving false information
Don’t be coerced into lying on your mortgage application; it’s a good sign that mortgage fraud might be taking place. Some may ask you to lie about how much money you make or how much you’re providing for your down payment, and as tempting as it may be, simply because you want the mortgage that badly, don’t give in. Instead, find someone more reputable to deal with.
Be aware of “no money down”
There are some ways to get a no money down mortgage, such as if you’re in the military or have an extremely high credit rating. There are some businesses who say you can pay no money down regardless of your financial situation. Be aware, because you could be getting wrapped up in mortgage fraud. Do your research and know the proper requirements before you take advantage of a deal that could be too good to be true.
Beware of a Foreclosure Rescue Scam
While there are plenty of legitimate businesses who help those with mortgage troubles, you must tread carefully when dealing with a foreclosure rescuer. The way it works is that an individual has the owner of the home transfer the title over to them or a third party on their “team.” They let the owners think they can essentially rent their property and buy it back later. Don’t give in regardless of how tempting it sounds or you could see your dream home disappear before your eyes.
The reason so many become a victim of mortgage fraud is because they’re so desperate to save their home that they’re grabbing at any tempting offer that comes their way. Keep your cool and your eyes wide open and you’ll be able to spot a potential scheme before you become its next target.