The process of buying or selling a house involves multiple entities and significant financial transactions, providing both the opportunity and motive for mortgage fraud. Consumers should be aware that it is a crime to provide false or inaccurate information when applying for a home loan. But some forms of mortgage fraud are committed without the buyer's participation and can result in substantial losses.
These include property flipping, the use of stolen identities for real estate purchases, equity skimming and fraudulent appraisals. Read about mortgage fraud in FindLaw's Criminal Law Center for more detailed information about these types of crimes.
There are some important steps you can take to avoid becoming the victim of mortgage fraud. The Federal Bureau of Investigation, which investigates fraud, suggests the following:
If you already own a home and are having financial difficulties, beware of unsolicited offers to help you reduce or eliminate your mortgage debt in exchange for an up-front fee. These are not legitimate services and you may end up in a deeper hole than before. Also, never agree to sign over the house deed "temporarily" as part of a scheme to avoid foreclosure. Chances are, you'll lose your house permanently.