Here are a fdew notes I took the other day while attending a class on mortgage fraud.

Here is the statement that sums it all up:

If the real entire deal that is on the contract that goes to the lender, is on the HUD-1 you will probably have no problem.

Red Flags for possible mortgage fraud:

  • The loan officer says he does not want to know something.
  • Some part of the transaction did not appear on the contract or the HUD-1 statement.  It was handled separately.

Two types of loan fraud:

  • Loan for house. (designed to get someone in a home the lender may not have approved)
  • Loan for profit.

Tips for real estate agents:

  • Get everything from lender in writing.  No verbal communications.
  • Talk to your sellers when you list.  Discuss possible loan fraud issues with them.
  • Because someone says they have done it that way for years, does not make it legal.
  • If you have to ask, it is most likely not OK.
 
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6 Comments on Mortgage Fraud Class Notes

JUN
27
2008

Good post..thanks for those tops..you have to be so careful ..
1:37pm • #1
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Michael - This topic comes up a lot.  We all have to be on guard.
2:00pm • #2
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Randy the biggest one that I run into is Buyers trying to get money back at the Closing.  Sellers are allowed to contribut money toward Closing Costs and Repairs, but they can not hand a Buyer a check.  The second one that I run into a lot is Borrowers trying to figure out a way to lie about their income now that Stated Loans are pretty much gone.
10:56pm • #3
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George - The buyers are committing fraud by misstating their income even if the mortgage broker tells them to do it.
11:04pm • #4
JUN
30
2008
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I always get everything in writing - if it's not in writing, it didn't happen.  I saw that story about the Oahu mortgage fraud guys - I'm sorry but they just looked like crooks!
7:43pm • #6
JUL
01
2008
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Georgina - I have no sympathy for those who engaged in that practice for profit.  They hurt a lot of people, including those who bought their homes at inflated prices in the neighborhood around their bogus deals.
6:35am • #7

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