PROTECTING YOURSELF FROM MORTGAGE FRAUD

Mortgage fraud is rampant in the U.S. and it affects both borrowers and lenders. Sometimes, borrowers inadvertently commit mortgage fraud when a lender talks them into inflating their assets, while at other times, lenders use bait-and-switch tactics.

The best way to protect yourself from mortgage fraud is to work with a defense attorney. In the event that you are accused of committing mortgage fraud, you should promptly contact a criminal attorney with experience with white collar defense.

Identify Predatory Lenders

Many prospective homeowners shop around to find a lender who offers them the best rates. However, you should also carefully consider whether a lender might be using predatory tactics. Avoid lenders who inform you that you’ll never get a loan anywhere else or that refinancing can automatically solve your credit problems. Other signs of predatory lending tactics include trying to sell a home for much more than its value and asking prospective homeowners to sign blank documents.

Understand All Mortgage Documents

Sometimes, a lender may verbally tell you the terms of the mortgage, yet provide you with loan documents that bind you to an entirely different set of terms. Predatory lenders assume that many homebuyers will not read or understand all of the loan documents before signing. This is one reason why it’s essential to work with an administrative lawyer in the Maryland and D.C. areas. Your lawyer canthoroughly review the loan documents and let you know if there are any potential problems before you sign.

Avoid Falsifying Assets

Many new homebuyers are talked into committing mortgage fraud by unscrupulous lenders. They may be talked into falsely inflating their assets or providing false information regarding how they came up with their down payment. Never agree to provide false information. For example, if you receive a cash gift from your parents to use as the down payment, your lender will still need to consider a monthly payment to your parents as part of your monthly debts – even if the cash gift does not need to be repaid. Falsifying information about how you came up with the down payment could mean that the loan application will be declined or that you’ll lose your home.