Mortgage Fraud

Mortgage fraud is a huge problem in the real estate market.  Greed is the main cause of this and this greed causes a lot of mortgage loan scams that you need to watch out for.  Because of this fraud, the real estate market can become a bit skewed because both lenders and buyers can lose huge amounts of money because of these bad loans.  It can also cause ruined credit and higher taxes on the property.

It is important to know some of the warnings of fraud:

If you are selling:

If the buyer wants to pay more than the price of the house in order to get some cash back at the closing, you should be cautious.  Also be cautious if your real estate agent removes or changes a listing in the MLS service.

You should also feel the buyer out to make sure they are interested in the house itself and not just the closing.  If you accept any incentives to help out a possible buyer's fraud you can also be liable for any taxes on profits, etc.

If you are buying:

Do not participate in any deals where you receive an incentive like money to buy a house.  Also remember that most lenders have a cash back rule that it can be no more than 3% of the mortgage amount.