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Mortgage Fraud
The information in this section is intended to help you protect your home, you home’s equity and to avoid falling victim to mortgage fraud schemes. Start by learning to recognize and understand the signs of mortgage fraud.
Definition of Mortgage Fraud
The Federal Bureau of Investigation has defined mortgage fraud as the “intentional misstatement, misrepresentation or omission relied upon by an underwriter or lender to fund, purchase or insure a home.”
Mortgage fraud should not be confused with predatory lending, which occurs when a consumer is misled or deceived by agents of the lender.
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Foreclosure Rescue Schemes
A foreclosure rescue scheme takes advantage of vulnerable homeowners who risk the loss of their home through foreclosure.
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Fraud for Profit
Fraud for profit often involves multiple loans, multiple properties and elaborate, sophisticated schemes perpetuated to revolve equity.
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Fraud for Property
Fraud for property, also known as fraud for housing, generally occurs when a borrower wants to purchase a property he or she cannot afford under traditional mortgage lending guidelines.
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House Stealing
House stealing is a combination of two popular rackets, identity theft and fraud.
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Illegal Property Flipping
Property flipping becomes illegal when the value of the home is artificially inflated either through a fraudulent appraisal and/or fictitious renovations.
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Protect Your Home From Fraud
Review tips that will aid you in preventing mortgage fraud.
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Reverse Mortgage Fraud
With relative easy access to cash equity and difficulty in understanding reverse mortgage technicalities, many senior-citizen homeowners have become a prime targets of reverse mortgage fraud.
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Short-Sale Fraud
In this fraud, the perpetrator presents the homeowner with a bogus purchase contract that they will purportedly present to and negotiate with the mortgage lender on behalf of the homeowner. The perpetrator will secure possession of the property, supposedly to do some alterations necessary to secure a new loan on the property. While “negotiating” the short sale with the mortgage lender, the perpetrator rents the home to independent third parties and pockets the money, all without the knowledge of the homeowner.