No one wants to get caught up in a mortgage fraud scandal as the buyer or seller of the home. If you lie on any part of your application, this is considered mortgage fraud. This should be avoided at all costs. However, there are other types of mortgage fraud as well. During the home buying process, you are working with various types of real estate and financial professionals. There are many ways that they could be using deceptive practices. This is a guide to avoid it.
They should get previous business professionals contact information who has worked in real estate or with mortgages professionals. This will help people avoid dealing with the wrong people. Also, it is important to make sure the professional you work with is licensed. It is also important for sellers to comprehend everything that they sign. Hire a lawyer if something is not clear. Also, it is important to not sign anything with information left blank. This means someone could fill in the blank part however they want and that could be a trap. It is important for sellers to be firm about their asking price. Sellers should not agree to an amount above your asking price. This could lead to mortgage fraud. This extra important if you are asked to make up the difference after the property closed. You should also deny in extra money for ‘repairs’ or anything of that nature. This could lead you to fraud. It is also important to be careful of proposals that claim will save you from foreclosure. The seller could end up paying thousands of dollars and end up losing their home. It is a better idea to work with a good, reputable lender that will give you the whole set of closing documents.
Homebuyers should look out for “no money down” offers. This is a red flag for sure. It is important to review the sales history of the property you would like to purchase. Also, it is important to have your own real estate professional or appraiser determine the value of the home you would like to purchase. It is important to make sure the seller really owns the property. There are scams like this that happen so it is best to take caution. Also, do not give any personal information to someone claiming they are going to purchase a house for you in their name. This would be a bad move that good lead to legal problems for years to come. Just like sellers, buyers need to understand everything that they sign during the home buying process. Do not sign anything you do not understand. If there is any lack of understanding, hire a lawyer to assist you. As mentioned before, do not sign any forms with information left blank or that may contain incorrect information. Many times a broker will try to overstate the homebuyer’s income in hopes of making more money for themselves. You should always deal directly with whoever you are borrowing money from so there are no discrepancies. Every homebuyer should have the complete set of the closing documents. This will contain all the information they need and protect themselves against fraud.
You should be honest about your employment income. If you lie about it, there is potential for this to escalate. You should make sure that the professional you are working with does not lie about this as well. This could be a big problem. These are all things to look out for when you are either a seller or a buyer in the process.