Each mortgage scam contains some type of misstatement, misrepresentation, or omission relied upon by an underwriter or lender to fund, purchase or insure a loan. Mortgage scam is easily practiced mainly where mortgage industry professionals are involved. The true level of mortgage scam is largely unknown because a important portion of the mortgage industry is void of any obligatory fraud reporting and in addition, mortgage fraud in the secondary market is often under reported. Based on various industry reports and analysis, mortgage scam is invasive and growing. Mortgage scam can be basically analyzed as:
* Fraud for Profit - Sometimes referred as "Industry Insider Fraud" and the motive is to falsely inflate the value of the property, issue loans based on fictitious properties or revolve equity. Based on existing approximate reports, eighty percent of all reported mortgage scam losses involve collaboration or collusion by industry insiders
* Fraud for Housing - An illegal action perpetrated solely by the borrower. A borrower who makes misrepresentations regarding his income or employment history to qualify for a large loan does this type of mortgage scam. The motive behind this scam is to acquire and maintain rights of a house under false pretenses
Fraud for Housing cannot be compared to the scam done by mortgage scam industry professionals, which affect the borrowers. Predatory lending usually is targeted towards senior citizens, lower income and challenged credit borrowers. Mortgage lending representatives force borrowers to pay exhaustive loan settlement fees, sub-prime or higher interest rates, and in some cases, unreasonable service fees. The usual result is the borrower defaulting on his mortgage payment and undergoing foreclosure or forced refinancing. Our focus is to recognize the mortgage scam that could happen to us, the borrower.
* Fraud for Profit - Sometimes referred as "Industry Insider Fraud" and the motive is to falsely inflate the value of the property, issue loans based on fictitious properties or revolve equity. Based on existing approximate reports, eighty percent of all reported mortgage scam losses involve collaboration or collusion by industry insiders
* Fraud for Housing - An illegal action perpetrated solely by the borrower. A borrower who makes misrepresentations regarding his income or employment history to qualify for a large loan does this type of mortgage scam. The motive behind this scam is to acquire and maintain rights of a house under false pretenses
Fraud for Housing cannot be compared to the scam done by mortgage scam industry professionals, which affect the borrowers. Predatory lending usually is targeted towards senior citizens, lower income and challenged credit borrowers. Mortgage lending representatives force borrowers to pay exhaustive loan settlement fees, sub-prime or higher interest rates, and in some cases, unreasonable service fees. The usual result is the borrower defaulting on his mortgage payment and undergoing foreclosure or forced refinancing. Our focus is to recognize the mortgage scam that could happen to us, the borrower.
1 comment:
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