Upside Down Mortgage

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Mortgage Fraud Help

Question: Is there any way of recieving a "finders fee" or compensation for mortgage fraud tips?

I've come across a heafty amount of information regarding mortgage fraud. I don't want to throw anyone under the bus, but, there are a few jerks that I wouldn't mind being compensated for extending their fraudulent practices over to the right people.

Answer: Crime Stoppers

Victim of Mortgage Fraud? Help is here!

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Mortgage Fraud Consequences

Recently I received a call from a real estate investment club member that asked this question - "I am responsible for a mortgage that is being paid by the homeowner but I am afraid he will be stopping the payments shortly, what should I do?" I will call him "Sam" but it is not his real name.

I asked Sam about the property and he said the mortgage was for $300,000 but the current market value was only $230,000. As we discussed the problem further, it became apparent that Sam was not on the deed of the property but was personally responsible for the entire mortgage!

A close personal friend of Sam had asked him to take the mortgage out in his name and his friend would pay Sam $3,000 for use of his credit. While Sam's friend didn't intend to defraud Sam, this scam of using another person's credit to buy a property is called using a "Straw Buyer" to purchase a property. It is one of the most common types of mortgage scams and has resulted in thousands of people spending tens-of-thousands of years in jail and paying millions of dollars in fines.

Unwittingly, Sam committed mortgage fraud when applying for the mortgage because the lender has a questionnaire that asked if it would be Sam's primary residence along with other financial questions that Sam undoubtedly falsified - or the mortgage broker did to have Sam qualify for the loan. Sam, like many unsuspecting individuals are innocent people with good credit, looking to make some money. However, the law looks at them as being fully involved because they knowingly took money to get the loan and committed fraud doing it. This potential fraudulent involvement by Sam is what the scam artists use to scare Sam from going to the Police - "tell on us and you are part of the problem". Unfortunately, Sam is part of the problem but he needs to "roll-over" first with the Police to get lenient treatment.

Most often, in this form of fraud, the victim (Sam) is induced by being offered $10,000 to $20,000 to use his credit and a percentage (10% - 50%) of the profits when the property is sold. In addition, the unsuspecting individuals who use their credit, would be told that the property will be rented and the rent payments will pay the mortgage payments for which they are responsible. Unfortunately, they usually find out when they go to buy a high ticket item like a car and learn that their FICO credit score is in the 400's instead of the 700's!

The scam artists usually purchase the property at one price (i.e. $200,000) and with the help of an unscrupulous mortgage broker and appraiser, resell this property to Sam for a $100,000 INSTANT profit to themselves! Unfortunately, no mortgage payments are made and the scammers go ahead and rent the property and keep the rent until the property is foreclosed and the tenants evicted by the Sheriff.

Hopefully this isn't going to happen to Sam, but if his "buddy" were to sell the property, there would be a $70,000 - $90,000 loss on the property after the mortgage is paid off. The only way to sell it is by doing a short sale, but for the lender to allow a short sale, the mortgagor (Sam) must be in foreclosure.

So the "players" in this mess are Sam, who participated without realizing the potential legal consequences and the long-term damage to his credit, Sam's friend who has little or no financial loss or credit risk at stake and can walk away at any time, and the mortgage broker who must have had to participate in this fraud to the lender. The mortgage broker probably believes that he is immune to prosecution because he just took the application, but the problem is that he is a co-conspirator who told Sam how to "properly" fill out the loan application.

The moral of this story is not to allow anyone to induce you to use your credit to purchase a property - even if they say they will put it in your name. I have seen this guise used and the Sam's knowingly signed a Quit Claim Deed at the signing of the mortgage documents to "facilitate the sale" for the scammers. If you are approached by anyone asking you to "loan your credit" for a mortgage on a property, see an attorney to make certain you have representation and the deal is not a scam.

About the Author:

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Source - A Real Estate Scam that is Still Happening to the Unwary

Protect Yourself From Mortgage Fraud

Mortgage Fraud Detection And Prevention

If you are applying for a credit card, mortgage, car or personal loan, you should be familiar with the information included in your credit report. You are issued a number, known as a FICO score, which is calculated based on your previous payment history, number of debts with a balance, recent credit inquiries, and balance to available credit ratio.

Many consumers are aware that they can obtain a credit report, for a fee, from the three major credit reporting agencies. These include TransUnion, Experian and Equifax and they provide your credit report to loan officers, credit card companies, financial institutions and anyone whom you give permission to obtain a copy of your credit file. While many consumers know that credit reports can be obtained for a fee, many do not know that everyone is entitled to a free copy of their credit report from each of the 3 credit bureaus each year. Once every 12 months, you can visit http://www.AnnualCreditReport.com and gain instant online access to your free credit report.

When looking at a copy of your credit report, you will be able to view payment histories as submitted by each of your creditors, current and previous addresses along with any information included on public record. This may include civil judgments, bankruptcy or foreclosures, etc. If any of the information contained in your credit file is incorrect, you have the right to dispute that information directly with the credit bureau. At the time a dispute is submitted, the credit reporting agency will investigate and correct any errors that are made.

Additionally, if you are turned down for credit at any time, the creditor must provide you with a written reason for the decline. At that time, you may request a free copy of your credit report from the agency that provided the information to the creditor. By sending a copy of the denial letter to the credit reporting agency, they are then required to provide you with a copy of their entire file relating to you and your credit history.

It is recommended that consumers check their credit file every 6 months to ensure that information is accurate and to prevent or detect identity theft. If you notice an invalid address or credit line that you never applied for, this is an indication of possible identity theft and should be dealt with immediately by calling the credit bureau and having a fraud alert placed on your file. An informed consumer is a happy one.

About the Author:

Daphne is a Writer, Business Owner, Motivator and Self-Starter and full-time Mom. She enjoys writing articles about small businesses and family and tries to motivate other women with the same desires. She can be reached at 1-877-TOY-DIVA http://www.daphnespassion.com

Source - How To Get A Free Credit Report

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