FBI Releases 2007 Mortgage Fraud Report
The FBI has released its 2007 mortgage fraud report, and it is no surprise that the agency is finding that mortgage fraud is on the rise. Indeed, according to the report, the current mortgage market and real estate market trends are conducive to fraud:
The downward trend in the housing market provides an ideal climate for mortgage fraud perpetrators to employ a myriad of schemes suitable to a down market. Several of these schemes have emerged with the potential to spread as the recent rise in foreclosures, depressed housing prices, and decreased demand place pressure on lenders, builders, and home sellers. Emerging and re-emerging schemes for 2007 included builder-bailouts, seller assistance, short sales, foreclosure rescue, and identity thefts exploiting home equity lines of credit.
It is important to be on your guard at this time. Here are a couple mortgage fraud schemes to be on the lookout for:
- Foreclosure assistance. Beware of those claiming that they can stop a foreclosure on your home. Some scammers will claim that they can stop a foreclosure and help you save your home. They charge a “fee” of between $600 and $2,000 in order to “take care of paperwork” and “negotiate with your mortgage lender.” They have you fill out a bunch of forms, take your money — and your home goes through foreclosure anyway.
- Equity stripping. This is when scammer arranges to take over the loan on your home and let you live there as a renter. It stops the foreclosure, but you are signing your home over. The scammer may charge high rent. At some point, though, you fall behind again, but with no house now. You are kicked out, and the scammer has your home plus its equity.
- Bait and switch. Watch out for this. You are told that you are signing forms that bring your loan current — or restructure it. You pay an “administrative fee” or make a “loan payment.” In reality, the papers have you signing over the deed to your house. So you lose ownership of your house — and the money you paid.
Be sure to carefully examine all documents before signing. Or have a trusted attorney review them. If you are worried about foreclosure, talk to your mortgage lender well in advance and see if you can arrange something. Here are some resources that can help you avoid foreclosure:
- ACORN’s HELP program: 888-409-3557.
- Neighborhood Assistance Corporation of America: 888-302-6222.
- Homeowner’s Hope: 888-995-4673
Tags: mortgage lender, home equity, home mortgage loan, foreclosure,
mortgage fraud, mortgage loan blog, avoid foreclosure
