In the current scenario where interest rates have gone high, home prices are touching the sky and the real estate market has gone tighter, applying for a mortgage has become expensive for most home buyers. While most borrowers are in need of more income, on the other hand, lenders are finding it hard to form a strategy to make a good profit on loans. This has given rise to mortgage frauds. But what are these frauds? How to indentify it? Your answers lie here.
This type of mortgage fraud is the fasted growing kind. In this, an applicant deliberately hides their intention for using the house. A homeowner might show that he intends to live in the house, but instead, he plans to rent it out. This fraud is committed because applicants who apply for house occupancy don’t qualify for a low rate of interest and down payments.
“Fake Buyer” Fraud
The fake buyer fraud occurs when a phony buyer or what many real estate professionals would call them ‘straw buyers’ lets a homebuyer to don another person’s identity to get the mortgage loan approved. The fake buyers usually have a better credit score than the homebuyers. Once the house gets sold to the counterfeit buyers, they give the deed to the intended homeowner. Desperate home sellers can become an easy target of such scammers. To avoid being one of the victims, you can turn up we buy houses Virginia offer made by real estate agents.
Home Appraisal Fraud
A home appraisal fraud is the one in which a house’s price gets increased beyond it worth fraudulently. Higher the appraisal, the higher would be the value of the house, which means the seller will make more money on his house. But a home seller can avoid such fraud by availing sell my house fast for cash service provided by many reputed real estate companies.
Financial Income Fraud
Another common form of mortgage fraud is producing inaccurate information of income to get bigger and better loans. People may do so to obtain loan approvals for the amount that they are not eligible. If the lender finds the job listed in the loan application to be a generic one instead of a specific job or the lender is unable to confirm the applicant’s job record, he might be getting scammed.
Mortgage Foreclosure Relief and Debt Management Scams
Many a time it so happens that a scammer contacts the homeowner offering help if in case he is unable to make payments or falling behind on this mortgage. Criminals get hold of their target through publicly available foreclosure notices. They lure the distressed homebuyers promising of lower payments or at times they provide them with the facility of making the payments for them in exchange for rents to their agency. However, they make no such payments for your mortgage and eventually you might fall into foreclosure. This kind of fraud is known as foreclosure rescue schemes, foreclosure scams or debt management scams.
In this type of mortgage fraud, the mortgage provider encourages the buyer or applicant to forge information on income, expenses, assets, down payment and all. At times they might also produce a doctored appraisal to the sell the house for more value than its real worth. Some predatory lenders knowingly provide more loan than the borrower can afford, often at a higher rate of interest.