Robert Shumake’s Tips to Protect yourself from Mortgage Fraud, Detroit, Michigan

Real Estate Agent with National Real Estate Network, LLC



Mortgage fraud is one of the fastest growing white-collar crimes in the country with Michigan being one of the top 10 locations for real estate scams.  The downward trend in the real estate market has encouraged mortgage fraud perpetrators to develop and utilize many schemes.  The recent rise in foreclosures along with a depressed market, declining values and decreased demand has placed pressure on lenders, builders and home sellers.  Fewer loans will be originated as lending practices tighten in response to the subprime lending crisis.  Identity theft is a popular tool for use in mortgage fraud.  With higher lending standards being enforced, individuals with good credit are valuable to perpetrators; therefore, at risk for identity theft and mortgage fraud schemes.


How it Works


Mortgage fraud is divided into two major categories; fraud for profit and fraud for housing.  Fraud for housing involves misrepresenting income/expense and assets/liabilities information on an application in order to obtain funding to buy a home.  Fraud for profit involves industry professionals including mortgage brokers, property appraisers and real estate agents who over state a buyer’s income, assets, property value and other information to trick lenders into approving mortgages.


Sometimes people commit identity theft to obtain housing loans, sell someone else’s home or take over other’s property.  Here are some tips to protect yourself from becoming the victim of mortgage fraud:


Never sign blank or incomplete documents

Never purchase property that you have not seen and personally inspected

Use only licensed mortgage bankers or lenders; find a broker through the National Association of Mortgage Brokers (

Have a local, licensed real estate agent do a BPO (Broker’s Price Opinion) to determine value

Don’t be pressured into using a particular lender, real estate agent or appraiser

Know your rights as a mortgage borrower

Don’t buy into get-rich-quick schemes of instant equity or investment property using your own name – investment property should be owned by an LLC to protect you from liability exposure

Do not work with someone who suggest that you lie on your mortgage application

Beware of lenders who charge excessive fees and prepayment penalties

Most importantly, be sure to look over and understand your truth in lending disclosure documents which spell out the terms of your mortgage, before signing a contract with a mortgage company


If you are in doubt, have an attorney look over your documents and advise you.  The fee for this service is little compared to the tens of thousands you can be charged for dealing with problems caused by mortgage fraud late



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Kenneth Cole
Weichert Realtors Appleseed Group, 2043 Richmond Ave. S.I.N.Y. 10314. office phone 718-698-9797, - Staten Island, NY
NYS Licensed Real Estate Salesperson

Thanks for the tips.  Now, how do I protect myself from some lowlife refinancing or selling my house out from under me?

Dec 30, 2008 10:56 AM #1
Sarah, John Rummage
Benchmark Realty LLC, Nashville TN 615.516.5233 - Nashville, TN
Love Being Realtors® in the Nashville TN Area!

Yes, deal with reputable people, and ask somebody knowledgeable if something doesn't sound right.

Dec 30, 2008 11:10 AM #2
Lou Ludwig
Ludwig & Associates - Boca Raton, FL
Designations Earned CRB, CRS, CIPS, GRI, SRES, TRC

Hi Ralph

Thanks for the update; very insightful information on a growing problem in the country.

Good luck and success

Lou Ludwig

Dec 30, 2008 11:19 AM #3
Barbara Delaney
Park Place REALTORS, Inc. - Roanoke, VA

Dear Ralph,

Thanks for passing on this info! Great advice!

Happy New Year!


Dec 30, 2008 12:09 PM #4
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