Types of Mortgage Fraud

In order to get the best mortgage you can you must know how to play the mortgage game. One of the things you will come across when you look for mortgages may be the possibility of mortgage fraud. Now mortgage fraud is not something that happens to everyone, but it is something that you really need to be watching out for. You do not want it to affect you. Here are some of the types of mortgage fraud.

Appraisal Fraud

This is a very common part of mortgage fraud. You may come upon an appraiser who is not honest. They will inflate the value of the property. This is a way of the people who order for the appraisal to get more money off of the house. That is why it is important to have the house appraised on your own terms. It is important for you to pick someone to appraise the house.

Straw Buyers

These are buyers who are not actually the ones using the mortgage. People will bad credit will use these people because they have good credit and can get a better rate and actually qualify for the loan. The original identity of the true borrower is hidden. Straw buyers are generally in on the scam and this will not just take place at one home. Numbers of properties are often purchased.

Flipping

This on the surface is not such a bad thing. A house will be bought, and this will be done legitimately. Then the house will have improvements made to it. Once this is all done the house will be resold quickly after. This is not a bad thing. The problems come when people start lying. They may lie about the improvements as well as the value of the home in general. So if someone has done improvements, they need to accurate inform you of how much the house is now.

Foreclosure Scams

These are the scams that really look to pick on people who have big financial problems. These problems are so large they risk losing there home. The person running the fraud will note this and call up the homeowner. They will tell the owner they can get them out of debt and save their house. Of course, this will come at a fee. When they get the fee the person running the fraud will disappear. This can also come about from someone who offers you a refinance.