Buying a home is right up there with some of the most impactful events in a person’s life. Unfortunately, many people become victims of mortgage scams and fraud.  Someone is always out there looking to make a quick buck. Criminals prey at a time you could be the most vulnerable. You’re distracted and excited about this next chapter of your life. The fact that you’re falling victim to a scam doesn’t even show up on your radar. Understanding mortgage fraud is critical to avoid it. We want to celebrate your achievements with you, and to do that, we feel that it’s necessary to help you avoid scams. Here’s what you should know:

What is Mortgage Fraud?

Essentially, fraud is an intentional misrepresentation. Someone presents information they know to be false, deceitful, or exaggerated. The FBI explains that mortgage fraud is a “crime characterized by some type of material misstatement, misrepresentation, or omission to a mortgage loan which is then relied upon by a lender.” Mortgage fraud is categorized into two categories: fraud for profit and fraud for housing. Fraud for profit is typically committed by industry insiders while fraud for housing implies false information provided by the borrower.

A mortgage scam is something that’s often committed by an outside party altogether. For example, say someone is refinancing their home. The loan is closed, and the mortgage document is recorded, which is typical of a refinance.  The recorded mortgage document is public knowledge. A criminal has access to your name, address, county, loan amount and Bank. This is enough information to try to scam you out of money.  This can come in various solicitations.  You could get something in the mail offering “Mortgage Payment Protection.” The whole thing looks legit. It could look like it’s coming from the bank where the mortgage originated from, and since the mortgage document is recorded at the County, it could include any of the mortgage details. Sounds legit, right? Wrong. The fine print on the bottom states: RETURN PROMPTLY- Simply complete and return today. Not affiliated with any lender. Please beware. When in doubt call your lender and read the fine print. Don’t become a victim of a mortgage scam. The benefit of a community bank is a more personal experience. We’re happy to help answer your questions.

Karen Abfalter Mortgage Banker                      320.968.6300