Mortgage fraud investigations have skyrocketed since the financial crisis began in 2008, and a recent report released by the FBI’s white collar crimes division indicates the number of investigations has steadily increased in the years since.
If that’s not bad enough, apparently now the mafia is getting involved in the scheming, drawn by the chance to rake in “high profits through illicit activities that pose a (relatively) low risk for discovery.
As a homebuyer, you should familiarize yourself with the concept of mortgage fraud in its many forms.
As defined in the FBI’s report, mortgage fraud is “a material misstatement, misrepresentation, or omission relied on by an underwriter or lender to fund, purchase, or insure a loan. This type of fraud is usually defined as loan origination fraud. Mortgage fraud also includes schemes targeting consumers, such as foreclosure rescue, short sale, and loan modification.”
Buying a house is likely the biggest financial decision you will ever make. Select real estate professionals who understand your needs and look out for your best interests. The Internet is a great place to get started on your search, but you should supplement that information with input from your friends, family & neighbors who’ve recently bought or refinanced a home.
To get a sense of the types of questions you should ask at the beginning of your homebuying adventure, check out these pamphlets created by the Federal Trade Commission that cover deceptive mortgage ads, buying a home and tips for homeowners.