Ready to buy a new home? Become a happy homeowner, not a victim of mortgage fraud. Many lenders, appraisers, and real estate professionals are ready to help you make this important financial decision. Con artists with fraud schemes are also on the lookout for their next target. Misinformed home-buyers, often first-time purchasers and seniors, fall victim to predatory lending or loan fraud.
Get the facts with this free Mortgage Fraud Online Toolkit.
1. Before you buy a home, attend a homeownership education course offered by a U.S. Department of Housing and Urban Development (HUD)-approved counseling agency.
2. Interview several real estate professionals (agents), and ask for and check references before you select one to help you buy or sell a home.
3. Get information about the prices of other homes in the neighborhood. Don’t be fooled into paying too much.
4. Hire a properly qualified and licensed home inspector to carefully inspect the property before you are obligated to buy. Determine who is responsible for paying for repairs.
5. Shop for a lender and compare costs. Be suspicious if anyone tries to steer you toward one particular lender.
6. Do NOT let anyone persuade you to make a false statement on your loan application, such as overstating your income, the source of your down payment, failing to disclose debts, or employment length. When you apply for a mortgage loan, every piece of information that you submit must be accurate and complete. Lying on a mortgage application is fraud and may result in criminal penalties.
7. Do NOT let anyone convince you to borrow more money than you know you can afford to repay. If you get behind on your payments, you risk losing your house and all of the money you put into your property.
8. Never sign a blank document or a document containing blanks. Do not sign anything that you don’t understand.
9. Read everything carefully and ask questions. Before signing, have your contract and loan agreement reviewed by an attorney skilled in real estate law. If you cannot afford an attorney take your documents to the HUD-approved agency near you to find out if they will review the documents or find an attorney to help you for free or low cost.
10. Be suspicious when the cost of a home improvement goes up if you don’t accept the contractor’s financing.
11. Be honest about your plans to occupy the house. Stating that you will live there when, in fact, you will not (because you intend to rent the house or fix it up to resell) violates federal law and is a crime.
Sources: *U.S. Department of Housing and Urban Development (HUD)