For many property owners, their homes represent many things, from reaching an important life stage to the centers of their families. Mortgage fraud, however, may jeopardize their homeownership, as well as bring other repercussions.
Having an understanding of mortgage fraud may help people avoid getting taken advantage of.
Watch for common schemes
According to the Federal Bureau of Investigation, people may engage in mortgage fraud to obtain or retain property ownership or for profit. Some of the most common types of mortgage fraud schemes people attempt include the following:
- Loan modification schemes
- Commercial real estate loans
- Foreclosure rescue schemes
- Illegal property flipping
- Equity skimming
- Silent second
Scammers also take advantage of the Federal Housing Administration’s home equity conversion mortgage program to convert the equity elderly homeowners hold in their properties into quick cash.
Avoid getting scammed
According to the Office of the Attorney General of California, people may avoid falling prey to scammers by taking certain precautions. For example, those needing foreclosure assistance should not pay for loan modifications upfront and never make mortgage payments to anyone other than their loan servicers or lenders. Should those providing foreclosure assistance services offer guarantees to stop the foreclosure process or forensic loan audits, it should raise red flags. People should never transfer or sell their homes to foreclosure rescuers as this may cost them ownership of their homes.
Homeowners have rights against predatory lending practices; however, that does not mean that such scams do not occur. To protect themselves and their property, homeowners may benefit from working only with reputable services if they find themselves in need of mortgage assistance.