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Mortgage Fraud Prevention

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					Mortgage Fraud Prevention
Mortgage Fraud is any procedures to acquire mortgage with false
information. The objective of this article is to detect a mortgage fraud
at early stage for prevention. Mortgage Fraud increased gradually
recently. It is believe to be around in trillion dollars per year in US
and Canada.
Most of us dreams to own a house or home. In the process, we sometimes go
over board. The fraudster misrepresents information like employment,
status, tax, and other obligation just to obtain a house or home. Some
fraudster misrepresents for profit too.
A quick flip an ownership is an obvious signs of fraud. For example, the
fraudster buys a house. The fraudster gets a house appraisal with an
inflated house price. A straw man who is unconnected to the fraudster
purchases the house at an inflated house price. So, the fraudster earns a
huge profit. Usually, the fraudster finds a straw man and promises easy
money. Often, the straw man is a victim. In the meantime, the fraudster
may or defaults on monthly mortgage payment. In case of default, the
mortgage lender forecloses the house. Even though the fraudster loses the
house, the fraudster earns a profit from the sale of house to the straw
man.
Now, mortgage lenders keep a close eye on any property that is sold
within ninety days of ownership. This is to combat the last example.
Furthermore, some mortgage lender disapproves any purchase within ninety
days of ownership.
Common Mortgage Fraud
- inflate appraisal value of property to sell at higher price

- bogus home upgrades or renovations

- misrepresentation of information on mortgage application

- use fake documents and identification

- unpaid mortgage, insurance, property tax, and home owner association in
behalf of new owner

- flip property ownership to straw man

- fake down payment by the borrower
Mortgage Fraud Prevention Tips
Match the signature to the first and last name of the borrower if you can
make out the first and last name from the signatures. If the signature
does not match the first and last name, you can raise the fraud alarm.
We often forget that the telephone can be handy. The phone directory
verifies the identity of the borrower at times. Also, you can verify the
employment and identification by telephone.
With the advancement of technology, the fake documents are often hard to
distinguish. A simple way to detect fake bank statement is to match the
balance on previous statement to the next statement. Also, you can match
the paycheck amount with the bank deposit amount.
There is fraud detection software available in the market. The software
validates the information on the form. And, the software detects any
inconsistencies at the early stage of the mortgage application. Today,
the softwares are highly sophisticated and surprisingly user-friendly.
Mortgage Fraud evolves as we strengthen our mortgage fraud prevention
tools. In the future, a new nature of mortgage can rise at any time. We
must feel free to question unusual and suspicious activities. As a
borrower, you may want to use a reputable business entity. At least, you
must investigate the history of the business entity before you do any
financial transaction. It may be more costly, but it gives you peace of
mind. Or, you could end to lose your house.

Dennis Estrada is a webmaster of mortgage calculators, mortgage
dictionary, and mortgage fraud prevention website that gives access to
many resources, and calculators for mortgage.

				
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posted:10/12/2010
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