How To Discover Mortgage Scams

Each mortgage scam contains some type of misstatement, misrepresentation, or omission relied upon by an underwriter or lender to fund, purchase or insure a loan. Mortgage scam is easily practiced particularly where mortgage industry professionals are involved. The true level of mortgage scam is largely unknown because a significant portion of the mortgage industry is void of any mandatory fraud reporting and in addition, mortgage fraud in the secondary market is often under reported. Based on various industry reports and analysis, mortgage scam is pervasive and growing. Mortgage scam can be basically analyzed as:
* Fraud for Profit - Sometimes referred as "Industry Insider Fraud" and the motive is to falsely inflate the value of the property, issue loans based on fictitious properties or revolve equity. Based on existing approximate reports, eighty percent of all reported mortgage scam losses involve collaboration or collusion by industry insiders
* Fraud for Housing - An illegal action perpetrated solely by the borrower. This type of mortgage scam is done by a borrower who makes misrepresentations regarding his income or employment history to qualify for a large loan. The motive behind this scam is to acquire and maintain ownership of a house under false pretenses
Fraud for Housing can not be compared to the scam done by mortgage scam industry professionals which affect the borrowers. Predatory lending usually is targeted towards senior citizens, lower income and challenged credit borrowers. Mortgage lending representatives force borrowers to pay exhaustive loan settlement fees, sub-prime or higher interest rates, and in some cases, unreasonable service fees. The usual result is the borrower defaulting on his mortgage payment and undergoing foreclosure or forced refinancing. Our focus is to recognize the mortgage scam that could happen to us, the borrower.
MORTGAGE SCAM SCHEMES
False or Stolen Identity - A fake identity may be used on the loan application. The applicant may be involved in an identity theft scheme and use someones personal information without the true person's knowledge.
Inflated Appraisals - An appraiser acts in collusion with a borrower and provides a misleading appraisal report to the lender. This report inaccurately states an inflated property value.
Silent Second Mortgage - Buyer of a property borrows the down payment from the seller through the issuance of a non-disclosed second mortgage. The primary lender believes the borrower has invested his own money in the down payment, when in fact, it is borrowed. The second mortgage may not be recorded to further conceal its status from the primary lender.
Nominee Loans - The identity of the borrower is concealed through the use of a nominee who allows the borrower to use the nominee's name and credit history to apply for a loan.
Equity Skimming - An investor may use a nominee, false income documents, and false credit reports, to obtain a loan in the nominee's name. Subsequent to closing, the nominee signs the property over to the investor in a quit claim deed which relinquishes all rights to the property and provides no guaranty to title. The investor does not make any mortgage payments and rents the property until foreclosure takes place a few months later.
Property Flipping - A property is bought, falsely advertised at a higher value, and then quickly sold. What makes this property illegal is that the appraisal information is fraudulent. The schemes typically involve one or more of the following; fraudulent appraisals, doctored loan documentation and inflated buyers income... Kickbacks to buyers, investors, property and loan brokers, appraisers, title company employees are common in this scheme. A home may be appraised for $100,000 but is actually worth $30,000.
Air Loans - This is a non-existent property loan where there is usually no collateral. A broker invents borrowers and properties, establishes accounts for payments, and maintains custodial accounts for escrows. They may even set up an office with a bank of telephones, each one used as the employer, appraiser, credit agency for verification purposes.
Foreclosure Schemes - Are one of the worst. The loan agents mislead the homeowners into believing that they can save their homes in exchange for a transfer of the deed, usually in the form of a Quit-Claim Deed, and up-front fees. The perpetrator profits from these schemes by re-mortgaging the property or pocketing fees paid by the homeowner without helping to prevent the foreclosure. The victim suffers the loss of the property as well as the up-front fees. Be aware of offers that promise to save homeowners who are at risk of defaulting on loans or whose houses are already in foreclosure. If you are near a foreclosure seek a qualified credit counselor or attorney to assist.
Mortgage Scam per e-Mail - Many of the emails imply that the recipient has already been approved for a loan by making a vague statement such as "we are accepting your mortgage application". Recipients may believe that they are actually being offered a loan. These emails are basically just poorly implemented tricks to get recipients to click on the link provided and fill out a form which in turn will defraud you in one way or another. If enough information is provided, scammers might even be able to steal your identity. A lot of the sites will last only a few days before they are taken down. But new will arise as soon as they are suppressed. Often they consist of just one page containing a form. There is no information about the company offering the service, no privacy policy or a legal document, and no contact options other than the form provided. Often,the form is not secure (https), which is a good indicator that the site is not legitimate. No credible company would expect potential clients to submit information via an unsecured form. Never deal with spammers, regardless of how attractive their offer may seem. If they are unscrupulous enough to send unsolicited email, or allow their affiliates to send unsolicited email, then they have immediately shown themselves to be untrustworthy and you should avoid them at all cost. In general try to avoid the use of online mortgage loans.
Urban is the author of Mortgage Scam and Home Mortgage Fraud
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Mortgage Advice Services

5 Reasons Why Mortgage Advice Services Are Essential In Today's ClimateBy Alan Hall



Alan HallLevel: BasicAlan Hall is a Director of Firstxtra Ltd, which runs a website, specialising in finding the best mortgage deals, especially for those with special requirements ...
With the global credit crunch hitting the headlines day after day, if you are searching for a mortgage a new landscape has developed.
With the withdrawal of 100% mortgages in the UK, and some lenders actually ceasing to take on new mortgage business, it can be harder to find the best deal for you. Especially if you have adverse credit or are self employed, then finding a lender can be difficult. So in today's market, mortgage search services can help in the following ways:
As specialists, mortgage brokers have up to date knowledge of what mortgages are available
If you have non-standard personal circumstances, such as poor credit history or you are self-employed or need self certification mortgages then a mortgage broker will be aware of which lenders are the most flexible
A local mortgage broker will also have detailed knowledge of the market for specialist types of mortgage or remortgage such as buy to let mortgages or shared ownership mortgages
Because they are independent, mortgage brokers are able to offer you the best advice for your particular circumstances, without being tied to a specific lender's products
Mortgage advice services employ highly skilled staff, who are able to explain to you in detail what the benefits and drawbacks of a particular mortgage type are, whether you are a first time buyer, moving house or remortgaging If you are in any doubt about which direction to take for your new mortgage, then let an independent mortgage broker guide your steps and map out the path to the best deal for you.
Alan Hall is a Director of Firstxtra Ltd, which runs the http://www.findmethebestmortgage.com/ website, specialising in finding the best mortgage deals, especially for those with special requirements such as self employment, buy to let or adverse credit.
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FHA Loans - MD-VA-DC

FHA Loans In Virginia, Maryland and Washington DCBy Joel Steinberg
Joel SteinbergLevel: BasicJoel Steinberg is a mortgage banker residing in Alexandria, Virginia with an office in Vienna ,Virginia. Hi is spending much of his time helping those ...
The Mortgage market has radically changed. If you are in the market to refinance in Virginia, Maryland or Washington DC, it is best that you contact a mortgage lender or broker who is well versed in FHA mortgages, and all other options.
Not all FHA brokers or lenders are the same. They have different parameters and different rates. A well versed broker or lender will have a wide variety of options and will instinctively know which one fits your needs. If you pick the wrong lender or broker, you may end up getting a loan that is not the best one for your situation, or you may not qualify.
Some FHA brokers are only qualified to deal with one lender, and all they can do is hope that your situation fits the parameters of that lender. Other FHA lenders finance the loans themselves, and sell them to a specific lender. Many times, these lenders will have guidelines that are more strict so that they can be sure that they can sell the loan after it closes.
For example, these days most FHA Lenders require minimum credit scores. They differ from lender to lender. There are a few lenders that have specific programs, that will allow you to get out of an adjustable rate loan, even if your credit scores are low, provided you have met certain guidelines.
Another example is that many brokers, who, in a rush to get qualified to handle FHA loans, will have a very limited amount of options available, and very little experience in knowing how to get them approved
Joel Steinberg, of Alexandria, is a mortgage loan consultant affiliated with MortgagePrime in Vienna Virginia.He has over 20 years experience dealing with obtaining mortgages for his clients. He is current with all the new programs, including He also assists people in getting placed with better loans as soon as possible after a Chapter 13 is discharged, or one year after the Chapter 13 started.He can be reached at 703 637-3746, or on his cell at 703 298-6198
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This article has been viewed 23 time(s).Article Submitted On: April 18, 2008

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Know Your Loan To Value Ratio

HOME::Real-Estate/Mortgage-Refinance

Loan to Value Ratio - Know Your NumbersBy Bryan Benson

Say you have an arm of 4.25 with a loan balance of $178,000.00 that you can take as subject-to on that and you are getting the asking price of $325,000.00 for this house. What are you figuring the loan to value ratio for? Now you may be doing this for a private lender because you need the equity. Maybe you need to pay the individual the equity in the house.
This is not a problem, but you need to remember you should not have to pay all cash up front, regardless of what the owner is asking.
Let's go back to our scenario. The owner wants $154,000.00, which brings it up to the $325,000.00 that he is asking.
You might be better off restructuring the whole deal. There are three things to think about here. Number one-verify the asking price of the property. Number 2 get a full appraisal before you close on it. And third, if you have to come up with the cash, then you probably would be better off giving the seller some cash now and a second mortgage for the balance of it or even a third mortgage for the balance allowing you to go get a much smaller second to reduce your risks.
It doesn't make much difference whether you are going to go borrow the $154,000.00 or the $325,000.00. You are now becoming the stuckee. The minute you buy that property, you have got these two debts on it. You are going to be personally liable for the second mortgage and I would question whether this is really worth what the owner says it is worth. And more importantly, how sellable is this property? If the property is in a sellable area and there are interested parties then you may something to go on. Find out the answers to these questions!
Now if you have a buyer, this gives you quite a bit more freedom. Be wary of people who want to proclaim themselves as a buyer but who just want to do a lease option for a year. That is not a buyer. By doing a lease option they have just that-the option to leave once the lease is up-and you are still liable for the money. You are going to be personally liable for the second mortgage. But you should work hard to restructure this deal so you don't have all the risks. Be careful and figure out your ratio before making any decisions.
When it comes to real estate investing, I highly recommend information from Ron LeGrand . For valuable information regarding investing in homes visit RonLeGrand.com. You can also find useful investor resources in the free newsletter at MillionaireMakerNewsletter.com
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