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Mortgage fraud is a growing problem throughout the United States. You want the equity in your home to be more than the loan on your property. With the boom in the housing market there are those who will try to take advantage of this situation and try to get a quick profit. Here are some mortgage fraud schemes you should be aware of.

The first is property flipping. This is when land is bought, wrongly appraised for a higher dollar value and then sold fast. The false appraisal information is what makes this kind of property flipping illegal. The illegal practice involves usually the following: fraudulent property appraisals, loan documents that have been doctored, inflating the income of the buyer, buyer kickbacks and kickbacks to investors, and property or loan brokers, and appraisers and to those who are working for the title companies.

For instance a house worth $30,000 may be appraised for $90,000 or more in this illegal practice. Then there is what is known as the silent second. This is where a buyer of land borrows the money for a down payment from the seller by the issuance of a second mortgage that is not disclosed. The primary money lender thinks the person borrowing is investing her own funds in the down payment.

But the fact is the funds are borrowed. The second might not be legally recorded so that the primary money lender does not know about it. Then there is the nominee loans; straw buyers. This is where the identity of the borrower is hidden and a nominee lets the borrower use his or her name and his or her credit report in the loan application.

There is also a stolen identity issue which may be put on the application. The applicant possibly is involved in an identity theft scam where the real person does not know his name, personal information, and credit history is being used on a loan application.

Then there is the inflated appraisal where the appraiser is colluding with the borrower and submits an appraisal to mislead the money lender. The appraisers report falsely reports the property inflated value. In a foreclosure scheme the wrong doer targets homeowners who might default on home loans or those already in the foreclosure process.

Wrong doers trick the homeowner telling him or her they can save their house if they transfer the deed and pay up front costs. The wrong doer makes money from these tricks by remortgaging the land or taking the money paid by the owner of the house. The three most common foreclosure scams are the phantom help, the bust out and the bait and switch.

In equity skimming an investor may utilize a straw buyer. Then use misleading income verification records, and misleading credit history reports to get a mortgage loan in the name of the straw buyer. Before the escrow close the straw buyer signs the land to the investor by quit claim deed giving over all property rights and gives no title guaranty. The investor makes no loan payments and leases out the land until the foreclosure happens many months later.

Having a well experienced criminal lawyer Fort Lauderdale is greatly beneficial to the case. A Fort Lauderdale criminal attorney will use their expertise to fight for your welfare, guaranteeing the best possible outcomes.

Mortgage Fraud FAQ:

Question: Am I required to give information to a mortgage fraud insurance investigator?
I received a call from a mortgage fraud insurance investigator who wants to meet with me and go over my loan application for a home that I bought in 07. I sold the property as a short sale because I lost my job. Do I need to take an attorney with me?

Answer: You are being investigated for a felony crime, you need to hire an attorney.

Question: Where to report mortgage fraud by a person in OBTAINING mortgage?
Where can I report what may be lies by a person to obtain a mortgage? They are probably getting a FHA mortgage at that.

Answer: If you think there is true fraud involved then the department of HUD is where you go.

Question: How can I find information on the men and companies that commit mortgage fraud?
My home was taken from me by mortgage fraud. I can not afford an attorney. I have legal aid. They have now given me two attorney’s. They have informed me that I definitely have been scammed. But because it is so detailed and so much involved and because they are a free service only so much time can be invested into my case. If I can help by finding information out about these predators, It will help me. As of now I’m basically screwed unless I can see if they have done this before.

Answer: Mortgages are a matter of public record. Your mortgage is on record at the county courthouse in the county which the home is in. You can also search many counties by mortgage company or bank name and dates. When a lender or mortgage broker wants to get leads, they search courthouse records for homeowners. You can obtain someone’s balance, rate, bank, etc. You should fight this until you are satisfied. Also, the lender that did your loan MUST be licensed in your state. A lot of brokers get away with doing loans in states where they have no license.

Question: How long do we have to stay in our primary residence after refi to avoid a mortgage fraud?

Answer: I think it depends. If you turn around and buy a new home immediately and convert your former residence to a rental, you are on a little shaky ground. However, if you are now selling the residence, there is no harm no foul.

I don’t think anyone even asks your intent beyond 12 months in conjunction with a loan closing and even at that there is nothing binding about the time frame.

If there is no default (that is the payments are made as agreed), the chances of anyone ever alleging fraud is minimal at best.

Question: How does mortgage fraud affects the subprime mortgage crisis?
In the actual Subprime mortgage crisis in the US huge amounts of mortgage frauds were discovered. What’s the part that these frauds played in the actual mortgage crisis?

Answer: Lenders were not clear or were untruthful about how the adjustable rates worked and what the consequences would be to the homeowner in the future when they adjusted. Some started folks out with what were called “teaser rates”, like 4%, but it would adjust significantly within a short period of time, like 1-2 years, and the new rate would be 8%! These folks had no clue. Loans officers were not licensed in most cases and were not held to a higher standard like Realtor/Appraisers are. Thus they bent the rules to make a buck.

Others like a few builders and others would use what are called “straw buyers” to sign closing paperwork on a property they really didn’t own. These straw buyers put themselves in deep trouble with Federal Authorities. And some appraisers were in the mix as well, dummy up appraisals to match the trumped up sales of properties. So it all came down to greed and now we are all going to pay for this for many years to come. I would estimate that somewhere between 85-95% of Americans will feel some effect of this on their credit with no control on their part.

Question: How can we get help for mortgage fraud. How to find a lawyer when a person is indigent?
Don’t know where to find help. My son who is developmentally disabled was conned into signing mortgage papers on four homes totaling over $1 million. He had great credit but was only making a little over minimum wage in a warehouse job when he answered an ad in a Chicago newspaper saying he could make money by helping other people with poor credit get housing. He was naive enough to believe this. Now all four homes are in foreclosure and we have nowhere to turn. We live near Chicago. How could they give loans to someone making so little money? Does anyone know where to go for help? He’s been served with papers. We are retired and cannot help him much.

Answer: Personally I would contact the district attorney. They should be able to press criminal charges, you or your son would not have to pay for this. We pay them via taxes to protect people like your son, I am sure they will be happy to jump all over this.

Question: How to check a mortgage fraud?
I’m suspicious about someone having a fraudulent mortgage in my name. Is it possible to see that mortgage in your credit history? If so, how do you check it? I checked my free once a year credit report but couldn’t find any information. How do you check if you have a mortgage or not?

Answer: Pull copies of your credit report from the 3 credit bureaus. Equifax, Experian & Transunion, you should be able to order a copy for free. If it’s not on your credit reports, it doesn’t exist. If you’re worried about ID theft, place freezes on your credit file at all three bureaus.

Question: What is the penalty for mortgage fraud, particularly if a home owner falsifies income on a loan?

Answer: It’s a felony with possible jail time. But if you are making payments on time no one will press charges if that’s all you did. It’s pretty hard to falsify income when you have to produce 30 days of paystubs (where employment is verified as well as income with HR) and tax records (when banks order an IRS transcript to make sure what you filed with the gov’t matches what you gave to the bank).