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Mortgage Fraud News! Mortgage Fraud News! Mortgage Fraud News! FRAUDULENT MORTGAGE FINANCING DEVASTATES THE ECONOMY Foreclosure fraud to subprime scams, mortgage fraud has become a crime threat that is devastating homeowners, businesses, and the national economy. Learn more about the scope of  difficulties it has caused and the process across the nation to end it.  The potential impact of mortgage fraud on financial institutions and stock market is dire. If fraudulent practices are systemic within the mortgage industry and  allowed to continue, it will ultimately place financial institutions at risk and have adverse effects on the entire country.
Today is  Mortgage Fraud Expert A Staggering Swindle Mortgage Modification Scams FBI Financial Crimes Unit Mortgage Fraud Advisor Fraudulent Mortgages Avoid Mortgage Fraud Mortgage Fraud Expert Witness Mortgage Fraud Watch Mortgage Fraud Statistics CA Mortgage Fraud Updates Mortgage Fraud Task Force Stop Mortgage Fraud Mortgage Fraud Video Mortgage Fraud Blog Info Fraud Blogger News Facts About Mortgage Fraud State Attorney Generals' CA Mortgage Broker Info FBI MORTGAGE FRAUD INFORMATION TYPICAL FRAUD SCHEMES:   >>Backward Applications: After identifying a property to purchase, a borrower customizes his/her income to meet the loan criteria.   >>Air Loans: These are non-existent property loans where there is usually no collateral. An example would be where a broker invents borrowers and properties, establishes accounts for payments and maintains custodial accounts for escrows. They may set up an office with a bank of telephones, each one used as the employer, appraiser, credit agency, etc. for verification purposes.   >>Silent Seconds: The buyer of a property borrows the down payment from the seller through the issuance of a non-disclosed second mortgage. The primary lender believes the borrower has invested his own money in the down payment, when in fact, it is borrowed. The second mortgage may not be recorded to further conceal its status from the primary lender.   >>Nominee Loans: The identity of the borrower is concealed through the use of a nominee who allows the borrower to use the nominee's name and credit history to apply for a loan. Property Flips: Property is purchased, falsely appraised at a higher value, and then quickly sold. What makes property flipping illegal is that the appraisal information is fraudulent. The schemes typically involve fraudulent appraisals, doctored loan documents, and inflation of the buyer’s income.   >>Foreclosure schemes: The subject identifies homeowners who are at risk of defaulting on loans or whose houses are already in foreclosure. Subjects mislead the homeowners into believing that they can save their homes in exchange for a transfer of the deed and up-front fees. The subject profits from these schemes by re-mortgaging the property or pocketing the fees paid by the homeowner.   >>Equity Skimming: An investor may use a straw buyer, false income documents, and false credit reports to obtain a mortgage loan in the straw buyer's name. Subsequent to closing, the straw buyer signs the property over to the investor in a quit claim deed which relinquishes all rights to the property and provides no guaranty to title. The investor does not make any mortgage payments and rents the property until foreclosure takes place several months later.	MORTGAGE FRAUD & REAL ESTATE FRAUD NEWS Current Updates & New Mortgage Fraud Articles     Loading...       MortgageFraudNews.Com MORTGAGE MODIFICATIONS: DON’T GET SCAMMED! By Curt Novy, President Corporate Mortgage Advisors San Diego, CA In today’s difficult economic environment many home owners are facing foreclosure or realize they may soon face extreme financial hardships in the near future. Job layoffs, toxic mortgage loans, and falling home values have combined to create a perfect storm of financial strain on home owners like nothing we’ve ever experienced in the past. Homeowners across the nation are desperately reaching out for reliable information and straightforward assistance to cope with financial strains on consumers’ budgets. Unfortunately, millions of home owners risk the loss of their homes to foreclosure. The author of this article is a veteran mortgage professional, licensed real estate broker, and mortgage fraud expert witness. The following advice is provided to help educate consumers to make informed decisions in obtaining useful mortgage assistance and to avoid being scammed. Many “Mortgage Modification” firms are popping up on the internet and in the news these days. These firms are just beginning to catch the attention of state and federal regulators who are investigating and prosecuting scammers. The firms often promise professional assistance to lower your mortgage payments, modify your mortgage, or to save you from foreclosure. Two common themes are often observed by investigators. First, these companies usually require an upfront or advance fee ranging from $395.00 to $995.00 which is collected by unscrupulous and unlicensed firms just looking to make a quick buck. A request for upfront fees should be a red flag for you to carefully consider. Payment of fees to a local real estate attorney provides more protection since these funds are considered “Trust Funds” which require financial accounting. In addition to upfront fees paid to mortgage modification firms, substantial closing fees are also often charged if your loan is modified. The closing fees are steep and can range from $2,000.00 to $10,000.00 based on our recent surveys. Second, these firms sometimes mislead home owners by indicating they have a contract or formal agreement with your lender to work on your modification on your behalf. In reality, only a handful of companies nationwide have any type of formal agreement to assist you. Most lenders, including banks, are required to protect your privacy and will not discuss your financial circumstances with a third party. In simple terms, a mortgage modification is the agreement by the lender to modify the original terms of your home loan to provide payment relief, lower your interest rate, or defer past due payments. Lenders are under significant pressure from the government to help struggling home owners to stay in their homes and reduce foreclosures. Usually, you can contact your lender’s loan servicing or loss mitigation departments directly to file a request yourself. This is generally the best course possible for most home owners. Lenders generally will not ask you for any upfront fees. Keep in mind that lenders are inundated with modification requests so you must be very persistent and willing to contact your lender on a weekly basis. The savings in upfront fees and closing costs are well worth the extra time and effort. Since the mortgage crisis first began to surface in 2007, this is probably the best time to contact your lender to obtain the financial help you may need. Recent publicity and urging from politicians is forcing lenders to more aggressively process financial assistance for struggling home owners. If you cannot take the time to contact your lender directly, the second best course of action is to contact a local real estate attorney. Law firms are required to place your funds in Trust Accounts for your protection. Keep in mind that most mortgage modification firms are not properly licensed and do not use Trust Accounts to properly account for your advance fees. In fact, California recently posted an alert on their website warning home owners that mortgage brokers providing mortgage modification services must obtain approval from the licensing board; interestingly only a handful of brokers are approved to collect advance fees! Other states are beginning to quickly adopt formal licensing requirements for modification service providers. It’s important to note that many people now offering modifications are the same unqualified and unscrupulous loan officers who pitched sub prime and other toxic mortgage loans just a few years back. Tips to obtaining a successful mortgage modification and avoid being a mortgage modification scam victim: 1. Contact your lender directly. Be persistent. Don’t give up! 2. Hire an experienced local real estate attorney if you cannot get your lender to work out a suitable modification for you. 3. Require written references from modification service providers. 4. Verify proper licensing in your state. If unlicensed, move-on to a firm that is licensed or hire a real estate attorney. 5. Verify modification success rates and make sure this information is in writing. 6. Contact the local better business bureau. Check for complaints. 7. Avoid paying upfront fees to anyone except an attorney. 8. Don’t sign documents or agreements unless you completely understand what you’re signing. Never sign over a deed giving up title to your home without first consulting an attorney. Don’t use a Power of Attorney. 9. Ask for a written policy regarding refunds or money back guarantees. 10. Watch out for excessive fees. Compare and shop around. Curt Novy is not an attorney, does not offer legal advice, and does not provide mortgage modification services or referrals to attorneys. Mr. Novy is highly skilled in detecting and reporting complex mortgage fraud transactions. If you need assistance in saving your home or modifying your home mortgage, it is recommended that homeowners seek independent legal counsel or guidance from a qualified real estate professional.   CA DEPARTMENT OF REAL ESTATE ALERTS MORTGAGE FRAUD & PREDATORY LENDING PRACTICES The term "predatory lending" encompasses a variety of home mortgage lending practices. Predatory lenders often try to pressure consumers into signing loan agreements they cannot afford or simply are not in the consumers' best interest. Often, through the use of false promises and deceptive sales tactics, borrowers are convinced to sign a loan contract before they have had a chance to review the paperwork and do the math to determine whether they can truly afford the loan. Predatory loans carry high up-front fees that are added to the balance, decreasing the homeowner's equity. Loan amounts are usually based on the borrower's home equity without consideration of the borrower's ability to make the scheduled payments. When borrowers have trouble repaying the debt, they are often encouraged to refinance the loan into another unaffordable, high-fee loan that rarely provides economic benefit to the consumer. This cycle of high-cost loan refinancing can ultimately deplete the homeowner's equity and result in foreclosure. Predatory lending practices specifically prohibited by law include: Flipping - the frequent making of new loans to refinance existing loans Packing - the selling of additional products without the borrower's informed consent Charging excessive fees - Homeowners in certain communities, particularly the elderly and minorities, are especially likely to be targets of predatory lending but almost anyone can fall prey to abusive lending practices. You can protect yourself by knowing what you can afford; choosing a reputable, licensed broker/lender; understanding the loan application and contract; and being aware of commonly-used predatory lending tactics. Informed decision-making is your best defense! The FBI defines mortgage fraud as "any material misstatement, misrepresentation or omission relied upon by an underwriter or lender to fund, purchase or insure a loan." Here are a few examples of common mortgage fraud: Undisclosed kickbacks If you strike a deal with a home seller to give you a big wad of cash or to slip a check across the closing table, say, to pay for a new roof, and if the lender doesn't know about it -- because it's not disclosed in the purchase contract nor addendum nor your estimated closing statement -- it's mortgage fraud. Silent second mortgage A borrower without a down payment can commit mortgage fraud by borrowing the down payment from the seller in exchange for giving the seller a silent second mortgage, which is unrecorded (or records after closing) and hidden from the lender. Falsifying employment income Stated income loans were originally created for self-employed individuals whose income is difficult to verify, but some employed borrowers inflate their income above and beyond a W-2. Non-owner occupant claiming occupancy Lenders offer higher interest rates and less favorable terms to non-owner occupants because the lender's risk is higher. If you don't intend to live in the property, don't promise that you will. Down payment gifts you will repay Both parties, the giver and the recipient, commit loan fraud if the gift is to be repaid. Gifts cannot be repaid. Inflated purchase price If you have two purchase contracts and send the false contract with the higher sales price to the lender in hopes of obtaining a higher appraisal, it's mortgage fraud. Falsifying deposits Dishonest borrowers who do not have an earnest money deposit might state in the contract that the deposit was paid outside of escrow, which is fraudulent.	Check individual and corporate real estate brokers who have submitted Advance Fee Agreements for Loan Modification and/or similar services to the Department of Real Estate for review and have received "no objection" letters regarding their use. CA Dept. Real Estate     Title Co. Owner Guilty A South Florida title company owner pleaded guilty to masterminding a $40 million mortgage fraud scheme using straw buyers and bogus documentation to help borrowers qualify on more than 50 residential mortgages.   Another Real Estate Company Searched An on-going mortgage fraud investigation has led to yet another real estate company being raided by law enforcement authorities.   Not Guilty Plea on 13 Counts A 39-year-old New York man has been indicted on 13 counts relating to mortgage fraud charges. His attorney said the prosecution would not be able to prove the case because his client is innocent.   Fraud Haunts Executive A 49-year-old mortgage executive thought he had resolved a fraud crime he committed years ago, but now his actions have come back to haunt him. Federal prosecutors have charged him with one count wire fraud stemming from his "mistake" years ago.   Drug Investigation Reveals Fraud A 32-year-old Ohio woman pleaded guilty to money laundering and wire fraud after IRS agents tripped over evidence of mortgage fraud during a drug investigation.     STOP FRAUD! Tips on reporting mortgage fraud You will  need a concise comprehensive explanation of your case. As a rule prosecutors really aren't that familiar with mortgage or real estate fraud schemes. An expert in mortgage fraud familiar with lending practices and real estate transactions can prepare a report in a format used by law enforcement to document your case so you'll have a much better chance of getting a prosecutor's attention to investigate and prosecute fraud.
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