“How I Handled a Dishonest Mortgage Applicant”
This was how the conversation began:
I was referred by a friend, but I don’t remember his name. Not a good sign. I have a preapproval already, but I don’t like the amount of items they want from me. Not a good sign. I am buying a property $100,000 below its real value. Not a good sign. We’re showing the purchase price $20,000 higher and the seller, will be giving me the money back, under the table. Not a good sign. We’re both going to use the same attorney. Not a good sign.
OK, you have offered a lot of information, but I need to ask a few questions. Can I see a copy of your preapproval?
Answer: I gave it to the seller.
What company did the preapproval come from?
Answer: I spoke to this guy online, but don’t remember the name.
What did they ask you for, that you had a concern about?
Answer: They wanted my tax returns.
What information did you give them, that they were able to give you a preapproval?
Answer: I told them that I was self-employed and that I brought in $100,000 per year.
Can you share how much net income, that you actually paid taxes on in the last couple of years?
Answer: I have a good accountant she makes sure I don’t show any income.
Did the other company ask what you what your net was?
Answer: Why would they do that?
Well, you get the idea. The entire transaction was a sham. I told this individual that no one was going to do the mortgage for him. He told me that he was going back to the online person and hung up.
Mortgage Fraud Rises Due to Dishonest Applicants
While fraud in the financial services sector declined year-over-year from April through June, mortgage fraud increased, according to the latest report from Experian, a global information services company based in London.
“Over the course of the last year, we have seen mortgages continue to be targeted at a high rate,” said Nick Mothershaw, director of identity and fraud services at Experian.
Thirty-nine out of every 10,000 mortgage applications were fraudulent during the April to June period, up from 32 out of 10,000 in the same period last year, according to Experian.
Mortgage fraud far outpaced savings account fraud, which
increased from 6 out of 10,000 to 13 out of 10,000 over the year.
Mortgage fraud increased 23 percent over the quarter.
Mothershaw explained the rise in mortgage fraud stems from “more people trying to misrepresent their personal, employment and credit information on applications to get properties out of their reach.”
In fact, 24 percent of all attempted mortgage fraud cases were the result of individuals misrepresenting their credit by hiding certain information.
Additionally, 21 percent of instances of attempted fraud came from people “providing misleading employment histories,” according to Experian.
Another type of fraud on the rise, according to Mothershaw, is misrepresenting the intended use of the property, “such as applying for a regular residential mortgage on a buy-to-let property.”
Combating fraud required “thorough and efficient validation of customers’ identities and the information presented on the application form,” Mothershaw stated.
“It is vital that finance providers share comprehensive and timely information about finance applications and known frauds to help combat this common threat to the industry,” he added.
image: teerapun/freedigitalphotos.net
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