Protect Yourself from Mortgage Fraud

Posted by John Sabia on Monday, July 16th, 2012 at 3:12pm.

Be Aware of Mortgage Scams

Consumer protection regulations and education serve as best defense in combating fraudulent activity... Historically low mortgage rates have begun to revive South Florida's sluggish economy, while helping to sell existing Fort Lauderdale homes and condos and to spark new construction in Fort Lauderdale and elsewhere. During the first week of July, average interest rates dropped to record-lows for both 30-year (3.62%) and 15-year (2.89%) fixed rate home loans, according to Freddie Mac.  "Construction on one-family homes rose for the third consecutive month in May to a an annualized pace of $516,000," reported Frank Nothaft, vice-president and chief economist at Freddie Mac.  "Furthermore, homebuilder confidence rose in June to its highest reading in per five years." A recent article published in the South Florida Sun-Sentinel, suggest borrowers could save an average of about $180 per month on a $200,000 thirty year mortgage if they could get a 1.5 percent lower interest rate. But homeowner beware, suspicious mortgage loan activity continues to rise, particularly in South Florida, warn law enforcement.  Fraud allegations are investigated but he FBI which defines mortgage fraud as "a material misstatement, misrepresentation, or omission relied upon by an underwriter or lender to fund, purchase, or insure a loan." Strategies You can Use Although fraudulent activity represents just a small group of real estate participants, it is still very important homeowners understand the dangers involved and take the necessary steps to protect themselves.  Here are a few helpful tips to avoid becoming a victim of mortgage fraud:
  • Do Not sign anything that you have not read and/ or do not fully understand
  • Do Not deed your property to anyone who is not paying off your mortgage at the closing
  • Do Not make mortgage payments to anyone except your lender, unless your lender instructs you to do so in writing
  • Do Not pay anyone for a loan modification or to "qualify" for a government or lender program
  • Do seek legal advice before making any decision
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John Sabia

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