How to Spot Home Loan Fraud
How to Spot Home Loan Fraud
April 20th, 2011
The need to refinance one’s home loan can come about as a result of a desire to make some money off of a property into which the home owner has long poured their money, both in renovations, remodels and consistent monthly repayments. Refinancing can also be motivated by the home owner’s inability to continue satisfying their repayment schedule, and thus they need to find a way to lower their monthly obligations and seek to modify their loan toward that end. Many home owners who fall into the former category are generally safe from home loan fraud because they are willing to take their time and seek out the best refinance terms for their situation. The latter group of owners, on the other hand, are ripe for schemers and fraudsters who would like nothing more than to leverage these owners’ sense of urgency and openness in order to earn themselves a personal profit.
Home loan fraud can be avoided, but first it must be detected and reported. To spot home loan fraud, home owners should keep an eye out for the signals detailed below.
Fraudulent companies will encourage home owners to stop paying their provider
This strategy is not simply a matter of advising home owners to cease their payments to their home loan provider, but rather to transfer those payments to the company or individual posing as modification experts. Criminals who take this approach will often convince home owners that they are acting as intermediaries with the owner’s provider and that an arrangement has been made for payments to be funnelled through the unethical company. Other instances of this form of fraud can occur through mortgage brokers who attempt to repay the owner’s home loan in full and then demand repayment, albeit with much higher interest and other unfair terms. Before the home owner pays any money to these companies, they should report them to the proper authorities as no established and trusted home loan modification representative will ever encourage owners to forgo payments to their providers.
Fraudulent companies will encourage home owners to relinquish their homes
In the process of applying for a home loan refinance, the home owner will encounter a higher than average amount of paperwork. Depending on the nature of the loan modification, the volume of this documentation can grow quite sizeable. Criminals rely on the confusion and disorientation that such a bombardment of papers tends to produce by inundating owners with documents that contain unfair agreements. Examples include documentation that essentially transfers ownership of the individual’s home to the fraudulent modification expert. For this reason, home owners should always read each piece of paper and each agreement thoroughly and on their own time. If the modification expert is applying undue pressure to sign such papers without a full review, it is a very good signal that the expert is perpetrating home loan fraud.
Fraudulent companies will encourage home owners to falsify information
Most mortgage modification experts know that it is in their best interests to ply their trades with a modicum of subtlety and charm if they are to successfully dupe their customers. Not every criminal is so sophisticated, however. There are mortgage modification experts who eschew smoothness in favour of being blunt and upfront, attempting to persuade home owners that they can obtain a fantastic home loan refinance if they are willing to simply fudge a few of the facts. The data they encourage owners to falsify is often times minor data that they can easily pass off as no big deal. Owners should report such fraud immediately and keep looking for ways to refinance.
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Australian Home Owners Vulnerable to Mortgage Fraud, The Costs of Refinancing a Home Loan, Concerns about refinancing a home loan, The Traps of a Fixed Rate Home Loan, Why You Should Not Take Out a Loan For a Mortgage Down PaymentTags: home loan, home loan fraud, home loan tips, home mortgage, mortgage, mortgage Australia, mortgage tips
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