>Mortgage Fraud

Mortgage fraud hurts buyers, lenders and real estate agents. Here is a quick look at just three types of mortgage fraud making news today:

The “straw buyer”: Someone approaches you and offers you a few thousand dollars for the use of your name and credit information. You may also be offered a fee to sign a form that includes fraudulent information (such as that you intend to reside in a given property). Once your job is done, the person behind the operation is to take on the mortgage and property title.

Protect yourself: Although it may seem like easy money, do not participate in this fraud. Not only is it illegal, but you could also be left on the hook for missed payments. Never accept a fee for the use of your name, signature or credit information.

“Flipping” property: Investing in and reselling real estate is not a crime – it can be savvy financial planning. However, falsely inflating the cost of a substandard property is fraud. This can be done through fake appraisals and other buyers (who qualify for a large mortgage) who are part of the scheme.

Protect yourself: Real estate agents and buyers must ensure appraisals are done by a reputable company – and take the time to look back at the property's history. The false appraisal may have carried through more than one transaction. Always use licensed real estate agents and check out investment properties for yourself.

Identity theft: Someone obtains your personal information and takes out a mortgage in your name. You may never even know this has happened until you're hit with a massive bill for a property you didn't know existed.

Protect yourself: Sign up for proactive identity monitoring to help you identify the misuse of your cards or identification. If you notice anything suspicious, notify your financial institution. Read through the other articles in the Protection Power learning centre (including this one on mortgage fraud and identity theft) and keep control of your identity.

 

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