Paper Topic:

Real Estate

REAL ESTATE

Mortgage fraud is one of the fastest growing white collar crimes according to the FBI , with reports more than quadrupling since 2001 (Willis

Before buying or selling a home or property , one should be knowledgeable of all the rules and regulations in the real estate business . Becoming educated on mortgage fraud and other real estate issues could save one a lot of anguish later on . Mortgage fraud occurs in two instances - for property by a buyer and for profit by a seller

With regards to property , buyers lie on their

applications to obtain a loan they might not otherwise have qualified for (Lloyd . For example borrowers of a mortgage might inflate their income and assets , or lie about their employment , to buy a more expensive property . These buyers typically use cash back for a down payment , so they seem like they 're worthy of a lower interest rate

In these cases , the buyers don 't plan to default on loans . Most of the time , the buyer is able to make their monthly payments . Their intention isn 't for cash profit , but to put a better roof over their head then what they could get with their actual financial circumstances Sometimes , these buyers don 't realize they 're breaking federal laws and committing fraud

Fraud for profit by a seller or lender is much more complicated , more criminal and more costly than fraud for property by a buyer . This type of fraud usually involves a group of sellers who play multiple roles in to inflate the price of a property (Lloyd . Senior citizens are especially easy targets for these types of fraud rings

The ring usually involves appraisers , mortgage brokers , and investors Some groups might even include notaries , real estate brokers and insiders at title and lending

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companies . These groups sometimes convince themselves they are doing business as usual however , these professionals and investors walk away with a lot of cash , while leaving a buyer unable to pay an inflated mortgage . Most of these investors claim ignorance in fraud claims

There are three types of common fraud schemes . The first is a straw borrower ' scheme . This type of borrower is used to serve as a cover for questionable mortgage transactions . The use of a straw borrower often occurs when the true identity or motivation of the borrower is kept secret to gain loan approval because the real ' borrower can 't qualify for a loan

Straw borrower ' schemes are more than likely being used if the borrower has no credit history someone signed on the borrower 's behalf other names were added to the contract no sales agent was involved or the source of funds is questionable

Another common fraud scheme is called builder bailout ' This occurs when a builder is motivated to quickly sell a property in a depressed real estate market . This type of fraud is evident if the builder will do anything to sell the property the price and appraisal are inflated no-money-down is...

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