Silent Crime Against Homeowners: Mortgage FraudWritten by PJ Wade on Monday, 15 April 2013 19:00
Mortgage fraud is on the rise. However, these silently-perpetrated crimes are preventable. The fraudsters can be caught and stopped. You and your home can be protected. Will mortgage fraud take more homes, or will this be the year homeowners win?
Mortgage fraud occurs anytime false statements are provided to make a lender believe a borrower can afford more than they really can, or to indicate the property involved is worth more or less than its real value. Loan origination fraud and distressed homeowner scams are two common types of fraud.
You may wonder, especially if you don’t need a new mortgage, "Why should I worry about Mortgage Fraud?" Stolworthy stresses that mortgage fraud represents crimes against homeowners which also affect lenders, real estate buyers, sellers, neighboring property values , community budgets ... and maybe you and the value of your real estate.
The problem is not a lack of Fraud Prevention Information for homeowners and the professionals who serve them, nor a lack of support for victims of mortgage fraud :
- The problem lies in engaging the attention of homeowners before they act against their own best interest.
- The problem lies in delivering support to victims of mortgage fraud before they give up, lose their homes, and silently fade away.
- The problem is encouraging homeowners and those who suspect fraud to get in touch with law enforcement before fraudsters go after their next victims.
"Mortgage fraud is such an important issue," said Michelle Boykins, Director of Communications for the National Crime Prevention Council (ncpc.org ). "NCPC is hosting the NCPC Mortgage Fraud Virtual Conference 2013 with the Bureau of Justice Assistance (BJA) and the Office for Victims of Crime (OVC) because people need the right information from sources they can trust.
"So many homeowners/homebuyers don’t know where to turn for help or to recognize the signs of a scam. In addition, law enforcement is dealing with limited resources and manpower. Through our public education efforts, training of law enforcement, and working with partners like the organizations we have assembled [for the Conference], we are providing opportunities for awareness, action (investigation), and solutions (prosecution)."
Mortgage fraud comes in many forms with new variations continually popping up, but these crimes always find opportunity in uninformed, sloppy, or needy homebuyers, homeowners, real estate professionals, lawyers and/or lenders who act without thinking or who act even when they don’t completely understand what is going on. The "perps" can be real estate investors, industry insiders, lenders, or even borrowers.
Clear thinking steers you clear of mortgage fraud and helps you detect fraudsters before they are successful:
- Stolworthy, in his presentation at the NCPC Virtual Conference, stressed that fraud prevention involves asking questions and treating everything like the business it is. This includes asking real estate and other professionals for their credentials. He also suggests borrowers and savvy consumers start their fraud-free real estate project with a visit to www.hud.gov where they’ll learn about free services and other opportunities. Then, on to the Federal Trade Commission www.ftc.gov for hard-core consumer protection input.
- Homebuyers can be their own worst enemy when they don’t thoroughly read and question a mortgage document before signing, or when they sign an incomplete, inaccurate, or blank document with assurances like "don’t worry, we’ll take care of that later." Not only do you want to avoid signing in those situations, you want to avoid everybody who tries to pressure you or "friend" you into not acting in your own best interest—like signing over your deed.
- Desperate homeowners can let their need for a "savior" undermine self-preservation. If promises made by a "foreclosure rescue company" sound exactly what you dreamed about, check out all claims to be sure they were not just "dreamed up," before you give anybody one penny or sign anything. Demands for "cash in advance" scream criminal intent.
- Converting home equity into cash through a reverse mortgage can be a nerve wracking experience since these conversions are not as reversible as their name indicates. However, the prospect of turning home value into cash can be so attractive to distressed homeowners they drop their defences and fall prey to devious schemes and high-pressure sales people. Check with hud.gov before acting in desperation.
"Attend" with a group of friends and fellow homeowners—a great reason for a pizza night. Since fraudsters target neighborhoods, get more than one step ahead of them thanks to NCPC and the committed Financial Fraud Enforcement Task Force at Stopfraud.gov - all waiting to act on your report of mortgage fraud.