Mortgage Fraud Schemes

Fraud is becoming much more common in the mortgage industry. To protect your home and your homes equity it's exceedingly critical to see the signs of property fraud. It's also critical to know how to report mortgage fraud to state and federal agencies so they can stop con artists from preying on uninformed borrowers.

Con artists can frequently target property owners already fighting to meet their greeneasylife.com mortgage loan commitments or are anxious to sell their houses. There is help available when facing financial problems or foreclosure, just make sure you are dealing with a respected organization before getting involved. Fraud scams may sound like an outstanding deal, but unfortunately their ultimate goal is to take your house, never to assist you in saving it.

Below are just 2 of the fraud schemes going around today:

Foreclosure Rescue Scheme

If you have started to fall behind on your loan payments, this might seem like an appealing solution, but look out. A foreclosure rescue scheme frequently leads off with a con artist proposing a promise to pay off the overdue greeneasylife.com mortgage loan, allowing you to remain in the home as a tenant with the choice to buy the home back when your financial situation improves.

What actually takes place is a series of well thought out steps designed to cash out the equity in the house and vanish:

The homeowner will be required to title over the house to the new borrower who is oftentimes "investing" in a rental property as part of the "rescue", but who is actually part of the scam.

The proceeds of the sale payoff the overdue loan and the new borrower removes all the equity in the property, never to be seen again.

The unfortunate property owner is now nothing more than a renter in a home they no longer own, unaware that the new borrower is not even making payments. When the new owner never makes a payment on the mortgage, the previous owner is evicted from the house and they have lost the house and all the equity in it.

Scam artists are extremely crafty people and will often alter the scheme depending on the property owner they are talking to, so be very careful.

A few of the warning signs that a scam artist may be attempting to set you up as a victim of a foreclosure rescue scheme are:

Being approached by a stranger with an unsolicited "rescue" offer.

Receiving an unsolicited visit, mail or circular about "foreclosure rescue" or keeping your home.

Taking Part in a complicated deal that you don't fully understand.

Signing papers that have blanks or dishonest statements. Regardless of what you are told, this is never okay.

The optimum solution when you are facing financial difficulties that may jeopardize your home is to always to speak to your lender or a well-thought-of counselor.

Illegal Flipping

Flipping is a legitimate exercise where an investor buys a house which is in need of repairs or upgrades, makes the necessary modifications to the house in a very short amount of time and sells the home for a profit.

We've all seen the TV shows about flipping and they're great fun to observe. Simply many scam artists who use flipping to produce money illegally. Often times, the scam artist will offer more than the expected cost of a home with a stipulation that the "surplus" sum above the asking price is returned back to the borrower at closing.

At closing, the inflated value of the home will be attributed to home improvements which were in fact never made. The con artist will keep that extra money and never make a payment on the loan causing him to default on the mortgage.

As a homeowner, especially one whose home has been on the market a very long time, this may look like an appealing deal but remember: falsifying documents is fraud and a felony.

Steve Crown has been writing articles online for nearly 5 years now. Not only does Steve specialize in green earth and recycling, you can also check out his latest website which contains information on mortgagebreakdown.com/loan%20programs/zero-down-home-loans.aspx zero down home loans and mortgagebreakdown.com/loan%20programs/reverse-mortgages-pros-and-cons.aspx reverse mortgages pros and cons.