Mortgage Fraud: How to Protect Yourself

We don’t hear much about mortgage fraud, but it has been increasing in frequency, and it is important to know the red flags to watch out for, and how to protect yourself.

Red flags:

  • Someone offers you money to use your name and credit information to obtain a mortgage
  • You are encouraged to provide false information on a loan application
  • You are asked to leave signature lines or other important areas on a loan application blank
  • The loan amount on the mortgage is significantly higher than the value of the property
  • The mortgage has been refinanced several times and in each instance, the loan amount is higher
  • A seller or investment advisor discourages you from seeing or inspecting the property you are buying

These signs don’t guarantee mortgage fraud is happening, but it should raise suspicions and prompt you to ask more questions.

How to protect yourself

  • Watch out for anything that is too good to be true – conduct extra due diligence, talk to a lawyer, review contracts closely
  • Check your land title for a property you own on a regular basis to make sure there are no registrations on title you are not aware of
  • If you do not have a mortgage on your property, secure a home equity line of credit (HELOC) which will be registered on title. If someone tries to take your home away from you, that HELOC must be discharged through your bank, which may be the first notification you receive that someone is trying to defraud you of your home.

 Information provided by RECAThe above information is provided as general information and is not considered legal advice. Please consult your lawyer if you have any questions or concerns about this information.

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