Mortgage loan fraud are becoming a common ground for scammers to run their business. These scams often grow in numbers especially during a slow economy where real estate is slow and prices are high. Mortgage loans become a favorite vehicle for fraudsters when it comes to loan scams.
Identifying the different ways these fraudsters operate on mortgage loan can help you prevent from getting victimized. Being aware and identifying necessary actions come when the knowledge of how these fraudulent acts are being carried out.
Here are some common mortgage loan fraud that are carried out.
- Deed Theft
This happens when fraudsters pretend to be mortgage professionals that offer you refinancing your existing mortgage loan at a much lower interest rate. This is done by including, as part of the pages that need to be signed, a page that authorizes the transfer of the property to an individual or a company. The transfer may be for a period of time or depending on a term from the new mortgage refinancing.
- Payment of Upfront Fees
The most common fraudulent act that evolves around all kinds of loan is when the lender requires the borrower to pay upfront fees. With mortgage loans, scammers are charging high upfront fees that is justified by the value of the loan amount. Paying upfront fees is never a requirement for legitimate lenders. A lender should always be treated with red flags if they require payment for upfront fees. There is no reason for any lender to charge upfront.
- Mortgage Buy and Sell
Residential mortgages can be sold and bought by banks. Some fraudsters pretend to have acquired your mortgage who them assumes in receiving your amortization payments. They are too good with their craft that they can convince the borrower. The borrower pays for a few amortization and the only time they are able to find out is when their bank informs them that they have been in default in paying their mortgage loan amortizations.