Mortgage fraud has been a significant problem for past few years. It has been noted that in the year 2010, there was an estimated loss of around $3.2 billion due to mortgage fraud nationwide. It is expected to exceed in the year 2011. Combating mortgage fraud is a priority for all of us in order to improve the housing market. You can be a target of mortgage fraud if you own a home or are planning on purchasing a home or are attempting to short sale or foreclose it.
Here are 5 tips which will help you avoid mortgage fraud:
1. Referrals: You should contact the real estate agents and mortgage professionals in order to get referrals at the time of buying or selling a home. In order to be sure that the real estate agents and mortgage professionals are not scammers, you can check out their licenses with state, county, or city regulatory agencies.
2. Research: In order to be on the safe side, it is your responsibility to do the required research about the sale prices and the tax assessments of other homes in your neighborhood.
3. Down payments: In order to get a mortgage, you will have to offer a down payment. However, there are many lenders who will offer "no money down" loans. This is a trick to entice people to buy a home they really can't afford. If you don't offer a down payment, you may have to pay a higher interest rate and take out a higher amount of loan. So, it will be better if you could avoid no-down loans.
4. False statements: You should avoid making false statements on your loan application. You should give correct information regarding your income or the source of your down payment. If you give out false information, that will be considered as a fraud on your part.
5. Blank documents: Avoid signing any kind of blank documents. This is one of the best ways to avoid mortgage fraud. It is always advised that you should read and review all the documents which you will be signing at the closing of the loan. You can even contact a real estate attorney who can review the documents for you.