Any type of trickery or deception (fake information, double-dealing, maneuvering) employed while requesting for a loan, goes down as mortgage fraud and is liable to be punished by law. Lately, these mortgage frauds have been so frequent that many experts now blame mortgage frauds (along with the negligence on part of lenders) for an increased number of foreclosures, which consequently led to present economic crisis. Many investigations and research studies have confirmed the fact that a huge number of mortgage frauds were perpetrated in the last ten years or so. Though regulatory bodies are aggressively behind these con artists, fraudulent transactions are still taking place.
Sometimes, you are misguided or trapped in such transactions unintentionally, so you must be having an idea of what sort of misleading information is regarded as mortgage fraud. Though, all types of misinformation is considered a mortgage fraud, still there are some common methods that these swindlers use to deceive lenders or real estate buyers. In most cases, some insiders are involved, mainly because they know the system so well. Let's have a quick look at some of the basic types of mortgage fraud.
• Various fraudulent parties joining hands to defraud lender
As stated above, in a good number of mortgage frauds, one or more than one insiders are involved. This is one of the worst kinds of mortgage fraud, where the realty and mortgage experts team up to rip off the lender, these experts can be a real estate agent, appraisers, buyers with fake identity or even employees of the lending firm. This type of scam normally amounts to a whopping figure and most of the times the parties involved take advantage of some loophole in the system.
• Stating that you'll be occupying the property when in reality it's not the case
That doesn't really sound much like a fraud? But it is one of the most frequently used deceptions. Reason being higher interest rates and strict conditions imposed for the loans for non-occupancy properties. Investors present them as the likely occupants, to benefit from these relaxations in loan policies.
• Foreclosure Scams
Foreclosure scams are actually like adding insult to the injury, instead of ripping off the lender; they target the home owners going through financial turmoil and on the verge of foreclosure. Naturally, these home owners are desperate to get some help and these swindlers take advantage of this desperation by coming up with false rescue plans, if you find yourself in similar situation (facing foreclosure), make sure you are not being duped by these evil minds.
William King is the director of UAE Dubai Property & Dubai Real Estate Properties Portal, Pakistan Real Estate & Pakistan Property Portal and Property & Real Estate Directory . He has 18 years of experience in the marketing and trading industries and has been helping retailers and startups with their product sourcing, promotion, marketing and supply chain requirements.
