Zack Childress strategies to avoid mortgage scams

Criminal activities and unethical behavior by scammers have destroyed the rate of the economy. The banking sector, financial and real estate are few areas which are affected by scams.

Zack Childress reviews the strategies to be followed to avoid mortgage scam

The scam can be of two types,

• Misinterpretation and deception.
• Misrepresentation of facts and figures

1. Mortgage fraud refers to material misstatement, misrepresentation of the property relied on a lender to purchase a loan. The fraud can be committed by lenders as well as borrowers.
2. They can happen due to housing and for earning profit. The scam/fraud happens for housing is by borrowers who misrepresent or omit their employment, financial information, with the help of loan officers in order to possess the loan and ownership. It can be done by even individual persons who have plans of purchasing the property to reside permanently or sellers who are in plans of renting the property.
3. Scam for profit is done by industry professionals who misrepresent or omit client’s employment information for the sake of earning profit on a loan transaction. It can be committed by real estate agent, brokers and whoever part of the transaction. Apart from real estate, network of people who avails mortgage for a purpose gets cheated through scammers. Usually borrowers who avail HELOC scheme are scammers.
4. Other prevalent areas where scam takes place are flipping. The flipping is illegal when property under market value is purchased and appraiser quotes it with double the initial amount and certifies it as profit.
5. Occupancy scam is when borrower states that the place will be occupied by a buyer but remains vacant.
6. Straw buyer scam is when borrower uses the details of unqualified buyer and avail loan.
7. Identity theft is very common in mortgage fraud. It happens when scammer obtains the information from a person without his knowledge and victim remains unaware of it. Bank returns, tax information is stolen during the process.
8. The scammers avail loans for unoccupied and vacant properties.
9. Air loan scam is when loan is purchased for nonexistent land and nonexistent borrower. This is done by a large group of people to get ownership. They create fake mail id and other documents to get verified.
10. Appraisal scam is when agents and other set of people involved in the purchase deal wants to get benefit and maximize profit. They maximize the purchase value in order to get high commission.

Preventive measures

The court has already taken steps to prevent these mortgage fraud and scams. They have ordered loan officers to check the license twice before approving the loan. New laws and guidelines have been framed by the government and strict monitoring is done to prevent scam. The investors should be really careful while making a sale and hire reliable and reputed people in the entire transaction.

To prevent yourself from mortgage scam, Zack Childress quick REI cash system articles will help you with solutions.