March is Fraud Awareness Month, and as a mortgage broker, I’m committed to helping you protect your hard-earned money and your mortgage. Mortgage fraud is a serious crime – understanding the scams and knowing how to protect yourself is absolutely essential.

What is Mortgage Fraud?

The most common type of mortgage fraud involves criminals manipulating property values to secure a larger mortgage than the property is worth. Fraudsters coordinate a series of inflated sales to artificially drive up the price before taking out the mortgage and disappearing with the funds.

Warning Signs of Mortgage Fraud

Be on the lookout for these red flags that could potentially signal a fraudulent scheme:

• Tempting Offers: Someone offers you money to use your name and credit on a mortgage.
• False Information: Pressure to lie on your mortgage application.
• Incomplete Applications: Requests to leave important sections of your mortgage application blank.
• Mystery Property: The seller or advisor discourages you from physically viewing the property.
• Undisclosed Rebates: The seller or developer offers a closing rebate without informing your lender.

Beware of Title Fraud

Title fraud is a devastating kind of identity theft where a fraudster forges documents to steal ownership of your property. They then take out a mortgage against your home and disappear with the money, leaving you in a nightmare of foreclosure proceedings.

How to Protect Yourself from Title Fraud

Vigilance is your best defense. Follow these steps carefully:

• See it to Believe it: Always inspect the property you’re purchasing in person.
• Check Market Rates: Compare the asking price to similar listings in the area.
• Verify Your Professionals: Ensure your agents are licensed and don’t have undisclosed financial interests.
• Get the Full Picture: Request a copy of the land title or conduct a historical title search.
• Appraise and Inspect: Stipulate a professional appraisal and thorough home inspection in your offer.
• Demand Proof: Ask for receipts on any recent renovations.
• Protect Your Deposit: Make sure your deposit is held “in trust” for safety.
• Title Insurance: Strongly consider purchasing title insurance, ideally before any fraudulent activity can occur.

Let’s Stay Vigilant!

Remember, fraudsters are always evolving their schemes. Stay informed, stay alert, and never hesitate to ask questions. If something seems too good to be true, it probably is. If you think you might be a victim of mortgage fraud, don’t delay – report it to the authorities immediately.

Let me know if you have any questions or would like help refining your mortgage process to minimize fraud risk.