Whenever there is an increase in the housing market, so does real estate and mortgage fraud. Buyers hurry up on great deals to avoid losing out, however sometimes if they aren’t careful enough they will get scammed.
The course of buying or selling a real estate property involves a lot of people and vital financial transactions, giving both for mortgage fraud opportunity and motive. Buyers must be mindful that it’s against the law to give wrong information when applying for a house loan. However, there are Toronto mortgage brokers that don’t involve the buyer and can end up in considerable losses.
Mortgage fraud isn’t just pertaining to destructive lending practices that aim at particular borrowers. The FBI or Federal Bureau of Investigation defines mortgage fraud as “material misstatement, misrepresentation or omission relating to the property or potential mortgage relied on by an underwriter or lender to fund, purchase or insure a loan.” From this functional definition, we can ascertain that mortgage fraud can be committed by both specific borrowers and individuals working the in the industry.
Below are a few helpful tips that you may take so you can avoid becoming a victim of mortgage fraud.
Pay Attention to Strange Offers
Never give your information to anybody or sign documents that you don’t completely understand.
When you plan to buy or sell a real estate property, make sure that you know the person you’re transacting with. Get recommendations of real estate and mortgage professionals and make sure to check out their licenses.
Do the Math
Make sure to check the listing history of the house and perform a comparative market study. Look up for the sales and price range of the surrounding community. If the price of the house is higher compared to the average prices of surrounding houses, it may mean that somebody is overturning the property, or it’s falsely appraised.
Do Some Research
Research gives you information on the owner of the property, mortgages or claim on the registered title and also previous sales and transfers. You may also purchase title insurance to guard you against title fraud.
Protect Your Deposit
Make sure that your money is deposited in a real estate trust account by a lawyer or realtor. This will make sure that your money is safe until the deal is done.
Defend yourself by educating yourself on mortgage terms. Make sure to read each document that the lender gives you and if you are not sure on what’s written, you can always ask help from professionals.