Any industry must, at one time or another, deal with fraud. The housing market is not exempt from such a problem. There are several reasons fraud exists. In housing loans, those may include:
- The huge market – There are dishonest people who naturally want to cash in on the boom experienced by any market – and the demand for housing has increased over the past few decades.
- Just about anything (and everything) is online now even crooks – Unsuspecting buyers may be swayed by fast responses and approvals from unscrupulous people masquerading as online mortgage lenders.
- Cash cow – A new mortgage or a mortgage refinance can earn you money if you know what you’re doing. Those who have very little knowledge or experience may be victimized by poseurs.
- Not enough knowledge – Laws are there to protect people, but there are those who twist them to gain an unfair advantage over others.
You can reduce the possibility of being defrauded by unscrupulous characters by looking for these signs before making a commitment with a lender.
You Are Being Charged Upfront Costs
They may give you all sort of reasons to make you part with your cash. They may say they will reduce the interest, make sure you are protected against foreclosure, make the process of modifying your loan go faster, and just about any excuse to make you pay upfront charges.
They Charge Ridiculous Commissions
They may say you are getting the special treatment, and you can be sure that your loan will be approved earlier and with lower interest rates, guaranteed. But the catch is, you have to give them a higher commission.
They Accept or Encourage Fraudulent Documents
This is especially true for buyers who have bad credit or incomplete documents. The fake lenders will sign anything that makes you give them your money. They may even coach you in faking several documents, including credit reports.
They Want Cash Payments
You are supposed to pay through bank transfer, so banks can monitor and audit transactions. Fraudsters may ask for cash, checks, or wire transfers.
Anything that sounds too good to be true is a reason to walk away. If you have been duped already and have given them your money, and alarm bells are starting to go off, contact a mortgage fraud lawyer in Houston immediately.
Still, your best protection against fraud when buying a house or refinancing a mortgage is to do your research and transact only with a company recommended by people you know who are happy with the company’s services.