It’s unfortunate that mortgage fraud exists, whereby someone poses as a credible real estate professional and then scams upwards of thousands of dollars from an unknowing and unsuspecting individual. These criminal acts tarnish your industry but you can find comfort in the fact that the National Crime Prevention Council (NCPC) has tools available to assist you with helping victims persevere through these tough times.
NCPC wants to ensure that all victim service providers are proficient about the subject of Mortgage Fraud. By being knowledgeable, victim service providers can more easily identify the type of fraud and guide victims to viable solutions. Here are just a couple of types of mortgage fraud that you should become familiar with:
- Home Equity Conversion Scheme- This type of fraud is inflicted upon those over 62 years of age who are eligible for a Home Equity Conversion Mortgage (HECM). Fraudsters target the victim through local churches or investment seminars, convincing the homeowner to apply for a HECM to pay for home renovations. The con artist is so cunning that he/she will convince the victim to sign contracts without reading the fine print about the repairs and repayment. This scheme usually ends with the fraudster making off with the cash, leaving the homeowner with unfinished repairs and a large debt.
- Senior is persuaded to assign power of attorney to another party
- Communication with underwriter is requested only to be done through the person with power of attorney
- Loan Modification and Advanced Fee Scheme- The targets for this scheme are those who are delinquent on their mortgage payments. The fraudster will offer to save the homeowner from foreclosure by renegotiating the mortgage loan with the lender. The crook may actually go as far as to offer the elimination of the entire debt. The kicker is that the fraudster will demand a large upfront fee to make all of the homeowner’s problems disappear. But the only thing that will disappear is the con artist with the paid fee in hand, leaving the homeowner with even more problems.
- The company/person will attempt to charge the homeowner a large upfront fee
- Homeowner is directed to avoid contact with their mortgage lender
These are many other types of mortgage fraud that scammers are using to prey on victims. For a complete listing of mortgage fraud schemes and other training materials, visit the NCPC’s Mortgage Fraud Toolkit. (Source NCPC.org)