Mortgage Fraud - Be Aware

Posted by Eric Miller on Tuesday, October 12th, 2010 at 9:15am.

Be aware of real estate mortgage frauds !


According to real-estate market analysis mortgage frauds are on the rise. The Federal investigators have realized that there’s been an increase in frauds in the real estate market which had lessened after the collapse in the real estate market. There are names of various real estate brokers in the news for the wrong reason. They have mostly been put on involuntary inactive status for committing mortgage fraud. According to news, in 2009, $14 billion in loans, or about 0.7% of all home loans were originated with fraudulent application data.

What is a real estate broker?

A mortgage broker is a certified professional who acts on your behalf, to get you the best mortgage deal.  He is a person who acts as a mediator, to sell a mortgage loan, on behalf of an organization or a lender. He also helps you as a homebuyer in selecting a home, choosing a loan, getting pre-qualified for a home loan and completing the necessary paper works.

What are the different types of mortgage frauds?

There various types of mortgage frauds committed by the brokers are:
1. Fraud for profit - Fraud for profit or the “industry insider fraud”, is the most costly type of fraud. These schemes often involve a group of people who play multiple roles in the fraud. The initiators often receive larger percentages of the profit while others may be paid several thousand dollars for their part in the misrepresentation. For example, a broker may join with a loan processor to create a fictitious credit profile.
2. Fraudulent Qualifications – Generally certified real estate brokers assist buyers to get home loans. However, there are many such brokers who claim to be certified but they actually are not.
3. Taking money both from lender and borrower – This is one of the most common frauds committed by the broker. They will charge you as a customer for their services and will also take money from the lender.
However as frauds are on the rise, you should better try to avoid taking the help of a mortgage broker. Moreover, you should be aware of the new mortgage rule that prohibits the broker from collecting fees both from you and the lender.

You should keep away from the brokers who charge hefty fees from the clients. While choosing the right broker, be sure to check his credentials with the local associations and the local Chamber of Commerce.

 David Simond'ss experience in the mortgage industry is demonstrated by his work as a mentor with the MortgageFit Community. David is an active participant in community forums, as well as a frequent guest blogger and contributor on mortgage-related topics.

Eric Miller is an award winning Florida Realtor, salesperson and broker. His website, FortLauderdaleGroup.com provides an up-to-date guide to Fort Lauderdale Condos for sale, and the most complete buyer, seller and investor information for the Fort Lauderdale Real Estate Market.

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