Florida #1 in Mortgage Fraud
Posted by Lee Cameron on Thursday, April 29th, 2010 at 11:45am.
Ok, so it's not always good to be Number One. According to the Mortgage Asset Research Institute, Florida has the highest amount of mortgage fraud in the country with a fraud index of 292. In the index, 100 represents the amount of expected fraud, while 0 means that no fraud has occurred. So 292 means that almost three times the expected amount of fraud has occurred. Ouch.
So what is mortgage fraud? Well, mortgage fraud is simply defined as obtaining a mortgage under false pretenses. As you can imagine, this covers many things. Some of the most simple frauds are actually perpetrated by unethical mortgage professionals who list false income claims for borrowers or pressure appraisers to overvalue a home so that it will qualify for a bigger loan. There are also false occupancy claims where someone will claim to be buying a home to use as their residence when in reality it is only for investment purposes.
There are also more elaborate forms of mortgage fraud that involve identity theft and scams. Many popular scams take advantage of people suffering from the current foreclosure crisis. Scam artists will pose as companies who help rescue homeowners from foreclosure. They will convince the homeowner to sign over the deed to them and then they will turn around and sell the home to fake buyers (themselves or accomplices). They make sure that the appraisal is inflated so that the home sells for much higher then it's worth, then they take the loan money and disappear, leaving the bank stuck with the bill and the house. This type of scam is being seen more and more often.
Another popular method involves identity theft. A thief will find a victim with a high credit score and real property with a high value, they will steal that person's identity and use it to apply for a loan. Because they're impersonating a lender's dream borrower, they usually have no trouble getting a loan and walking away with the money.
There are ways to watch out for these frauds. Mostly, it involves common sense, caution and being vigilant and careful about who you deal with when it comes to your finances.
-Read contracts carefully before you sign them. Don't sign documents with blank spaces.
-Be wary of anyone who asks you to sign over any of your property to them. Also, be wary of anyone who demands payment upfront before services are rendered.
-Also be wary of dealing with any individual or company who seems reluctant to give you complete and accurate contact information.
-Research and take steps to avoid identity theft.
-If you misunderstand or have questions about anything that is going on with your mortgage, don't hesitate to ask a professional that you trust. Make use of other people's expertise.
Be careful out there, it's a tough time. There is some good news, though. That 292 Florida fraud index was a whopping 430 last year. At least it's improving!
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