Mortgage Fraud

Mortgage Fraud

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.


Mortgage Fraud Sources:

6 thoughts on “Mortgage Fraud

  1. Sarah Long says:

    This was actually very interesting to learn. My husband and I are just now looking at the housing market, and it’s very scary in many ways. 1. Just trying to find the best Lender. 2. Money Management throughout the entire process. 3. Making sure my, and our identity and information is going into the right hands. With this article, I’ve learned some of the ways to protect myself and my husband when we are taking this next step in life, because I honestly hadn’t considered before reading this article that when finding a great mortgage lender, it could be a prime chance to be scammed or worse.

  2. Sarah Long says:

    My husband and I are researching and getting LOTS of advice since reading this article. We are wanting to buy a house within the next year or so, and after reading how easy your identity can be stolen we are trying to find the safest mortgage lender. It’s actually surprising how some companies do have some kind of protection, but if your account was hacked then all your information is right there for anyone to grab. Therefore, we are asking a lot more questions about their security measures for accounts.

  3. Sonja Luther says:

    This is another article that shocks me. We’ve all heard of credit card fraud and hackers trying to get your credit card number, but this is unheard of. I never knew someone could refinance your home without your knowledge or do any of these things. I sure appreciate knowing about this.

  4. No Identity Theft says:

    So glad you and your husband found our article so helpful. That’s what we are here for. Most people don’t know about the dangers that are out there. It’s very important to be diligent with your identity so thieves can’t take advantage of you.

  5. No Identity Theft says:

    Hi Sonja, it’s really scary to hear about these tactics. Identity thieves are becoming more and more savvy. We as consumers need to keep up with them and learn about their ways of thievery. It’s all about awareness and that’s why we are here – to drop as much knowledge as possible.

  6. No Identity Theft says:

    So glad to see how much this article impacted you and your husband. We need more people like you out there really making an effort to become aware. I wish everyone was as diligent as you!

Leave a Reply

Your email address will not be published.