Home Values And Mortgage Fraud (continued)
How Are Mortgage Loans and Closing Details Used to Defraud Banks?
The straw buyers, who were using the organizers’ funds, posed as loan applicants. Lender documents were falsified, while the buyers’ true credit histories were used to secure the loans. An appraiser accomplice verified the inflated property values, and excessive loans were approved.
Through a combination of forged government documents and third-party intervention, the funds in excess of the true appraised price were disbursed to the organizers. They either made payments on the loans until the property could be resold for similar profit, or let the loan companies and banks take the hit of foreclosure.
Banks and lenders are always on the lookout for unusual movement of assets. Suspicious Incident Reports (SIRs) filed with state or federal agencies alert authorities to possible overarching mortgage schemes. Evidence is gathered and trends are then plotted. Paper trails and the repeat involvement of suspicious persons can lead to identification of the illegal activity and subsequent arrests.
With the real estate and lending markets volatile and unstable, the Federal Bureau of Investigation has made identifying and prosecuting mortgage-fraud crimes a top law enforcement priority.
What Can Homeowners Do to Steer Clear of Mortgage Fraud?
Keeping an eye on average comparable home prices can help buyers and sellers avoid being caught up in a scheme. It’s easy to do so via the Internet, as most real estate firms have Websites that list area prices and other statistics. If an appraiser delivers a suspicious number, interested parties might have a mortgage fraud attorney step in. For more prevention advice, visit the National Notary Association.
If you think you’ve fallen victim to a mortgage fraud scheme, you should contact
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