I've been hearing a lot lately about lender fraud. The industry is really scrutinizing loans to assure there is no fraud. I've been looking into what constitutes fraud and wanted to share with you what I've found.
The most common way that fraud occurs in home purchases is when monies are held back from the sale and given to the buyer or some other party.
It is not uncommon for money to be set aside from the seller's proceeds for some cost associated with the purchase. This is often referred to as a seller credit for non-recurring closing costs. In this case, it is perfectly legal for the seller to pay for some of the buyer's closing costs . These would be costs such as title insurance, appraisal fees, notary fees, etc.
The majority of problems that have been occurring have had to do with a buyer offering to purchase a property at well over the actual value of the property, then asking the seller to credit back a large chunk of money to the buyer or some other person at or after closing. This arrangement is often made through an addendum to the contract and involves more than one person actively attempting to deceive the lender.
So what should you do??? The age old advice still holds true, if you think the deal smells funny it is because there is something rotten in there. First, make sure all agreements are in writing. Next, make sure the lender receives all the addendums to the contract. The lender must be informed of all the financial agreements related to the sale of the property. Next, ask your real estate agent for advice. If the agent is unsure how to proceed, speak with the agent's broker about your concern. If you are still concerned, consult a real estate attorney.
Subscribe to:
Post Comments (Atom)
2 comments:
Hi,
Thank you very much for the article you published on mortgage fraud. We posted this story on our Mortgage Fraud Discussion Board: http://discussionboards.mortgagefraudqc.com/.
A similar thing happened to me in the mid-1990s by a company in Huntington Beach, Anastasi Realty and his brother who owned Anastasi construction. I was a single mother and making a very moderate income when I was coerced with promises of building my credit and hope of my own home ownership one day. After getting reeled in by promises of becoming a property owner (while renting myself), an intermediary orchestrated the loans on the homes that valued approximately $750k for the new construction town homes, back then!. There were first, second and Title 1 (or third) liens on the homes. Another co-worker was also in possession of three other units. After the simultaneous closings and the disbursement of all of the funds, of which I received nothing, the culprits pocketed close to two million dollars off of us. Within two months the “tenants” stopped paying the rents (one of the tenants was the individual who orchestrated the deals). When I began to inquire as the lender’s collection calls began, I was threatened with being turned into the FBI for my participation, and then my children were threatened and I left it alone.
This motivated my desire to learn more and I have had a career in fighting mortgage fraud for the past 10 years. If there is ever anything I can be of assistance with feel free to contact me. We welcome you to visit our Mortgage Fraud discussion board and encourage your readers to utilize our blog as well to share their similar experiences. The reason the criminals are allowed to continue is that their names and company information remain a secret until (and IF) there is a prosecution.
Please let your readers know they can openly share their stories so we can prevent other innocent people searching for the American Dream from having their lives destroyed.
Cindi Dixon, Director
Mortgage Fraud Investigations
Mela Capital Group
Cindi@MortgageFraudQC.com
http://ReportMortgageFraud.Org
http://discussionboards.mortgagefraudqc.com/
Cindi, I noticed on your mortgage fraud blog again you are not giving this author credit.
I also noticed that you took down my blog that you stole as well as your apology etc.
Post a Comment