There are fraudsters everywhere. They take advantage of unsuspecting people. They have made an art or a living from trickery, fraud and deception. They are commonplace everywhere, particularly when a huge amount of money or resources are involved.

Securing a mortgage is one good example of a business transaction that involves a great deal of money. Thus mortgage fraud has become pretty common. Mortgage fraud in general means performing a variety of misrepresentation such as giving false information in order to secure the mortgage loan.

In fact, according to the Federal Bureau of Investigation (FBI), mortgage fraud has become one of the fastest growing white-collar crimes in the United States. FBI has thus increased the number of its agents who are tasked to look after mortgage fraud-related cases. It is a federal crime to misrepresent yourself or provide false information in connection with your mortgage loan application. You may be criminally prosecuted.

Just as there are various types of mortgages and mortgage protection insurance, there are also many types of mortgage fraud. These include occupancy fraud, employment or income fraud, identity theft, failure to disclose liabilities, appraisal fraud, mortgage fraud ring, cash-back schemes, and ‘shotgunning’.

The borrower or mortgage applicant is usually the main perpetrator in a mortgage fraud. But it can also involve a number of persons, just in a scheme dubbed as mortgage fraud ring, when a group of individuals are in it together. The aim is usually to defraud a lender or the lending institution a huge amount of money. The accomplices to mortgage fraud may include the borrower, the loan or mortgage officer, the real estate agent or appraiser or even the escrow lawyer or attorney.

There are various fraudulent schemes or so-called modus operandi. For instance, a mortgage salesman or broker may ask a loan officer or agent of a bank to create a fictitious credit account for a mortgage borrower. Then can even sought the help of a real estate appraiser in order to inflate or increase the real value of the property that will be mortgaged. There is also a scheme called foreclosure rescue, where a fraudster would promise to pay off the mortgage borrower’s delinquent payments. It is not as good as it sound though. In the end the homeowner would lose ownership of his or her home, and become merely a renter. In effect, the homeowner has signed off his equity in his or her home.

Homeowners or mortgage borrowers, particularly those who have defaulted on their mortgage payments or at the brink of defaulting, should also be vigilant and avoid being victimized by mortgage fraudsters. The first thing that you should do is to make sure you are dealing with a reputable organization or its authorized representative. Do not deal with the so-called fly-by-night firms.

Even the banks, insurance providers and, other financial institutions are also becoming more vigilant in detecting fraudulent claims or applications of their customers. They are have become stricter and more thorough in reviewing as well as validating the documents submitted by borrowers together with their mortgage loan applications.

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