Posted on: 01st Feb, 2007 02:25 pm
I am weary of being accused of mortgage fraud without actually knowing that I was made part of such a fraud by my broker or closing agent, which I have heard is sometimes happening. I planning about buying a house, need to be sure that no such thing happens to me. what should I keep note of?what can be considered as fraud?any help will be much appreciated.
It is considered loan fraud if you or your agent makes incorrect statements to get you qualify for the mortgage. The fraud is done to allow you to qualify for any loan greater in value than you would otherwise qualify as per the norms set by the lender.
Neil Zlozower
Neil Zlozower
"what can be considered as fraud?"
Any kind of false statement made to the lender will be considered as a fraud. Some examples would be like;
1)
Giving the lender a false statement on who will be living. If you claim that it will be owner occupied and the actual intention is to use it as a rental property.
2)
Your offer to purchase contract mentions that you have paid more amount down but actually it is not correct. The bogus fund is shown as POC (Paid outside of closing) on the settlement statement.
3)
Someone gives you a loan to help you close the deal but the details of this second loan are not told to the first mortgage lender. This second is recorded a few days later, after the finalization of the first mortgage and its closing.
Any kind of false statement made to the lender will be considered as a fraud. Some examples would be like;
1)
Giving the lender a false statement on who will be living. If you claim that it will be owner occupied and the actual intention is to use it as a rental property.
2)
Your offer to purchase contract mentions that you have paid more amount down but actually it is not correct. The bogus fund is shown as POC (Paid outside of closing) on the settlement statement.
3)
Someone gives you a loan to help you close the deal but the details of this second loan are not told to the first mortgage lender. This second is recorded a few days later, after the finalization of the first mortgage and its closing.
One another type of such fraud is when someone gives you money for closing. This information should be recorded in the settlement statement but it is not. Sometimes the seller gives financial help for the purchase transaction to complete or the agent helps out by taking lesser amount as commission to what is actually due to him. In every such instance the use of any such fund should be notified to the lender. His approval should be there on the use of such a fund and be recorded in the settlement statement.