Mortgage Fraud

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Mortgage Fraud has become a common issue now a days and the clear evidences of mortgage fraud can be identified with the help of certain discrepancies between the actual terms offered by the mortgage lender and the ones provided by the mortgage broker such as inflated closing costs.

The mortgage fraud is often referred to as real estate fraud and to save the general public from such frauds the need of the hour is to coach them on the basic components of mortgage frauds, and the way such frauds occur will guide the general masses to identify them and nip them at the bud. Mortgage fraud can be classified into several types, to start with mortgage fraud can happen by misrepresentation of the actual information as well as data to gain the more and more mortgage contracts injudiciously.

There are evidences of mortgage fraud in which the specific property for which the mortgage loan has been applied for, is acquired by any friend, family member or confederate of the mortgage broker at an economic rate and then both the mortgage broker and his confederate forge the price proofs of that particular property and inflate the prices and submit it to mortgage lender to gain more money out of mortgage scheme. After the accomplishment of the task the stock broker as well as his confederate vanish with the extra money and the mortgagee is not able to recover the complete loan amount even from the sale proceeds of the collateral. Such mortgage fraud is harmful to the mortgage lenders.

The other form of mortgage fraud concerns the mortgagor, people with good credit scores are first searched out by going through their credit history and then the documents of the that person that required for securing the mortgage loan is forged, and the collateral used here is the property of the same person. Thus the actual property owner has to suffer from heavy loses as a consequence.

Certain fraud control measures should be taken to fight with this ever increasing problem of mortgage fraud and the most essential step would be examine the telephone directory to match the phone number of the mortgagor given in the mortgage application. This step is useful to in finding out that the phone number belongs to the same person. The next step in this regard would be to use the softwares especially prepared to identify frauds of all kinds, such softwares assist in substantiating the information provided by the borrower and identifies any misrepresentations that has occurred in the application form. These softwares presently have been over simplified to facilitate its operation by even the general masses.

It is always helpful to compare the balances given in the two consecutive statements and the sum on the pay check should also be compared with the sum of money deposited in the bank. Another way is to examine that the first as well as the last name of the borrower can be traced out from the signature of the borrower and in case of any mismatch the mortgage lender will be assured of mortgage fraud.

Last Updated on 5/26/2011