ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

Beware of Mortgage Fraud

Updated on September 5, 2012

Mortgages are long term contracts between borrowers and lenders and involve fairly large amounts when properties are involved. Because of this, many borrowers try to find ways and means to reduce the burden on them for making the repayment. Some of these tend to become activities that can be considered criminal and will constitute mortgage fraud.

The Beginning of Morgage Fraud

Most mortgage fraud, starts out innocuously, with the withholding or misrepresenting of information, which the person taking the loan feels may be detrimental to the loan application. It can also involve other acts that can in some way defraud the lender of his or rightful dues. This sort of mortgage fraud has reached large proportions and even led to a number of states enacting penalties for such crimes. Courts consider mortgage fraud the same as a bank fraud, mail fraud or money laundering and can sentence the persons committing this fraud for sentences that can be as much as thirty years.

What Constitutes Fraud

There are times when a buyer takes some cash or like amount, and does not disclose this fact to the lender. This is like reducing the value of a signed contract which indicates the value of the property and thus becomes fraudulent. There are times when borrowers are unable to make the required down payment, which is a must in all property deals. They, then commit fraud when they borrow this payment from the seller and create a second mortgage that is really not enforceable. Some people try to represent such borrowings as gifts that are to be repaid, but the very fact that it is called a gift, makes it a criminal activity if such a gift has to be returned. A number of people who are desirous of taking out mortgages also misrepresent their income so that they get better terms for the loaned amount. This is considered mortgage fraud. Fraud can also be established if a false contract with higher sales amounts is sent to the lender, so that the appraisal for the property is increased. Making a statement that a deposit has been made outside the contract, when it has actually not been done is also a mortgage fraud. Loan applications ask for a fair amount of information and many people skirt issues or misrepresent facts, if they feel these will in any way hurt their case. These are also considered as mortgage frauds. A false identity is used on some loan applications and this is a definitely case of mortgage fraud.

Other Fraudulent Activities

There are times when investors use false documents to get a loan in the name of a nominee. This nominee then signs over the property to the investor, who rents out the property and does not make any payments against the mortgage. The investor, meanwhile, rents out the property and continues to do so, until the lender forecloses the property. Some people even take out loans against property that does not exist. Brokers arrange for facilities that are used for verification. These facilities are closed after the loan is obtained. There are a number of ways that are used by unscrupulous people to commit mortgage fraud, and the legal authorities are hard pressed to keep abreast of such schemes, as newer ways are constantly being evolved.

Comments

    0 of 8192 characters used
    Post Comment

    No comments yet.

    working

    This website uses cookies

    As a user in the EEA, your approval is needed on a few things. To provide a better website experience, hubpages.com uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

    For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at: https://hubpages.com/privacy-policy#gdpr

    Show Details
    Necessary
    HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
    LoginThis is necessary to sign in to the HubPages Service.
    Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
    AkismetThis is used to detect comment spam. (Privacy Policy)
    HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
    HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
    Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
    CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
    Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the googleapis.com or gstatic.com domains, for performance and efficiency reasons. (Privacy Policy)
    Features
    Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
    Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
    Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
    Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
    Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
    VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
    PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
    Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
    MavenThis supports the Maven widget and search functionality. (Privacy Policy)
    Marketing
    Google AdSenseThis is an ad network. (Privacy Policy)
    Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
    Index ExchangeThis is an ad network. (Privacy Policy)
    SovrnThis is an ad network. (Privacy Policy)
    Facebook AdsThis is an ad network. (Privacy Policy)
    Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
    AppNexusThis is an ad network. (Privacy Policy)
    OpenxThis is an ad network. (Privacy Policy)
    Rubicon ProjectThis is an ad network. (Privacy Policy)
    TripleLiftThis is an ad network. (Privacy Policy)
    Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
    Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
    Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
    Statistics
    Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
    ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
    Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)