5 Types of Mortgage Fraud to Watch Out For
June 16, 2018
Owning a home is one of the biggest investments you will make in your lifetime and since few people can afford to purchase a home with cash, a mortgage is a necessity. A criminal law attorney Las Vegas residents trust say that although the majority of mortgages are legitimate, mortgage fraud does exist. These five types of mortgage fraud are the most common and by understanding what they are, you can protect yourself from being a victim or being charged with fraud after you have purchased a home.
When you apply for a mortgage, your income is a very important component. The bank or mortgage company bases how much of a mortgage you can afford on the income you bring in from employment. If you falsify your income records or employment history, you could qualify for a larger mortgage than you can realistically afford. If this is discovered after you obtain the mortgage, you could be charged with mortgage fraud.
If you are purchasing a second home, you may have different requirements to obtain a mortgage. In addition, interest rates may vary on investment homes than on owner-occupied homes. If you claim you will live in the home when you actually plan to rent it out, you are committing mortgage fraud.
The appraisal of the home that will be attached to the mortgage is almost as critical as occupancy and income. In most cases, a mortgage company will require that the mortgage be only 80 percent of the total assessed value of the home. There have been cases where sellers have hired unethical appraisers who agree to inflate the value of the home in exchange for a portion of the sale proceeds. This is a form of mortgage fraud that can be a serious problem for buyers.
House flipping is a growing trend in this country, according to the best criminal defense attorney Las Vegas. It involves purchasing a home that needs major improvements, usually a home that is in foreclosure and performing home improvements to raise the value of the home. Once the improvements are complete, the home is immediately put up for sale. A seller lies about the improvements or overinflates their value, they could be charged with mortgage fraud. This type of fraud is often combined with appraisal fraud.
In a straw mortgage, a borrower with good credit is listed as the buyer in order to hide the identity of a buyer who could not qualify for a loan. The straw buyer may be in on the fraud with the promise of a cut of the profits after the sale or they may also be a victim, believing they are investing in a real estate opportunity.
If you have been charged with mortgage fraud, contact the best criminal defense attorney Las Vegas residents trust by calling today or filling out the easy form online for a free no obligation consultation.