Lending Fraud

The most devastating type of mortgage fraud is the mortgage servicing fraud that affects the borrower. This is fraud committed by the lender, and is often referred to as predatory lending. This is any type of mortgage that involves higher interest rates or fees than the consumer actually deserves. This type of fraud takes advantage of under educated consumers who do not know what to look for in a mortgage.

Preventing and Detecting Fraud

The first step in mortgage fraud prevention is detecting it. In other words, you need to be wise to the tactics used by the scammers. First, if your broker tells you that you must use one particular lender, run the other way. Mortgage brokers should not have a vested interest in the bank you use. Second, any lender who pushes you to borrow more than you know you can afford. This is a sign that they are looking to make higher commissions off of your loan, and do not have your best interests at heart.

The most important way to make sure you are not a victim of mortgage fraud is to be given a copy of every single document you sign. If you are not, there is a problem. Finally, make sure that the broker explains everything to you and does not pressure you to sign something you do not understand or have time to view.

Second, protect those who are prime targets for criminals, such as elderly or young home buyers. Remember that scammers know who is trusting and who makes an easy target. If you have a vulnerable loved one, go with them through the lending process.

There are laws relating to mortgage fraud designed to protect both lenders and borrowers. Remember, if your mortgage is caught breaking these laws, you could be held liable, unless you have a licensed mortgage broker. This is why it is imperative to go through a licensed broker. If, however, you are found to intentionally have misrepresented your mortgage application, you personally will be held liable.

If you think you are a victim of mortgage fraud, the mortgage fraud laws say that you can contact the state mortgage banker's agency in your area to take further action. Remember, mortgage fraud hurts everyone, and it is time to take a stand against this damaging crime!