Tuesday, July 31, 2007

On Mortgage Fraud. Again.

One of my favorite bloggers posted today that someone has actually been convicted of mortgage fraud in Tennessee. I've had several buyers describe how lenders can get them in a house - the how-to's constitute mortgage fraud. When I've explained this to them, they generally freak out and often don't get the home because their only way is through fraudulent lending.

What is mortgage fraud? It's when the numbers are dummied up so that the underwriter and ultimate lender are misled into giving a loan. Now loans where you don't declare your income are okay because lenders know you're not providing back-up documentation to prove your salary. And if a buyer does this, he or she should expect to pay a higher interest rate.

In the simplest terms, it's mortgage fraud when something happens that the lender does not know about.

Here's a link to an amazing blog appropriately called Mortgage Fraud Blog. The best consumer is an informed consumer, so please bookmark these pages and stay up to date on the various schemes. Don't be a victim!

This news is older, but still informative... here's a link to identifying real estate scammers courtesy of CNN Money.


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