Warnings Signs of Florida Mortgage Fraud

Beware, owners and borrowers: Mortgage fraud is one of the fastest growing white collar crimes in the country, with reports more than quadrupling since 2001.

It’s a widespread crime, referring to a host of scams. However, most cases involve inflating the value of a property for more than its worth, with the scammer pocketing the difference.

Here are a few tips to help you avoid such schemes on your Florida home mortgage:

1. Get the sting
It really takes more than one person to commit mortgage fraud. First of all, you need an appraiser or a bank official who validates the inflated property price. It’s often hard to tell what even is artificially inflated because property values have increased so dramatically in some markets.

When the buyer unknowingly pays this higher price, the scammer’s profit is then locked in. All along, meanwhile, the Florida home loan lender either must not be aware of, or turn a blind eye, to the scam. Be on the lookout for it all.
2. Protect the vulnerable
Watch out for mom and dad. The people most at risk of falling victim to mortgage scams are older folks. First-time homebuyers can also be easy prey. Here are some of the states where mortgage fraud is most common: California, Florida, Illinois, Arizona and Nevada.

3. Recognize the red flags
Remember, scammers are usually real estate insiders. Therefore, recognizing a scheme may be harder than you think. But there are some red flags you should look for.

For example: Your broker insists you use a specific lender. But why? A Florida mortgage broker shouldn’t care what lender you choose. That’s your right and decision.

Another red flag: Lenders who encourage you to borrow more than you can afford. You should have a clear handle on what your financial comfort zone is.

4. Bypass the Scammers
To avoid falling victim to mortgage fraud, never buy a property without seeing it first. Hire your own appraiser. Fraudsters pay appraisers for the report they want. If you have questions about how the property was appraised, call the US Housing and Urban Development Department at 800-569-4287 or go to HUD.gov.