Mortgage fraud perpetrated by either the borrower or the lender has the power to effect the overall economy. The extent of mortgage fraud in the United States has had such a dramatic impact since 2010 that judges and federal law enforcement agencies are far less lenient when these crimes are discovered. Some criminals use identity theft to commit this type of crime making it crucial to keep your personal information safe, especially if you are currently seeking a mortgage lender, or paying off a mortgage.
The Effects of Mortgage Fraud
When you are looking for a mortgage lender or paying off a mortgage it’s important to understand how criminals can damage your credit, and even steal the deed to your home. There are many different types of mortgage fraud, with some of the criminal activity coming from borrowers, while other crimes such as predatory lending are committed by lenders. According to the FBI, mortgage fraud was behind many of the 29 million foreclosures in 2010, a number that contributed to a downturn in the U.S. economy. For anyone whose identity is stolen for the purpose of mortgage fraud the loss of home equity, or the loss of a home to foreclosure is a possibility. Even for someone who has paid off their home mortgage, the damage to credit can take years to remedy. Homeowners over 65 years of age are especially at risk.
Refinancing a Home Out from Under You
With just your social security number and a few other items of your personal history a thief can take out a loan in your name. Unfortunately, this can even include a home loan if a lender is either fooled by the criminal, or in on the crime. One of the most common methods of mortgage fraud, however, involves the equity in your home. With your social security number, and some details of your past financial and employment history an identity thief can refinance your home without your knowledge. The criminal will refinance for more than the value of the home, then take the money leaving you with the debt.
Deed Transfer Without Your Knowledge
Mortgage fraud can also be performed even if the victim has the mortgage paid off. Identity thieves can use the same type of personal information to perform a deed transfer. The criminals transfer the deed of your home into their own names, or the names of an individual working with them. They then take out a new mortgage on the home. The thieves take the loan money, and of course, never pay it back. This can leave you with a home in foreclosure even if you were not responsible for taking out the loan. Sadly, victims of this type of crime are often among the elderly since identity thieves know they are the most likely to have complete ownership of a home.
Protecting Your Home
In order to protect your home, it’s necessary to be especially wary of giving anyone your social security number, or other personal information.
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