Boise Real Estate Home > Boise Mortgage Fraud > How To Protect Yourself from Mortgage Fraud

How To Protect Yourself From Loan Fraud

It is often said that buying or refinancing a home is one of the biggest financial decisions you will make. Home loans are complex and provide many challenges to the average homebuyer. In order to be a smart consumer and protect yourself from loan fraud there are lenders, Boise real estate agents, home appraisers, and other professionals ready to educate you concerning the home buying and loan process and what to expect. Understanding the home buying process can go a long way in protecting you and your money. Each year, first-time homebuyers and seniors are misinformed and fall victim to predatory lending or loan fraud.

Types of Schemes

All across America, people are losing their money and their homes because of predatory lenders, mortgage brokers, home improvement contractors, and appraisers. Below are a few examples of how these scam artists create victims of loan fraud and predatory lending.

Homebuyers are encouraged to be dishonest about their income, expenses, or the cash they have available for a down payment in order to get a home loan.
Homes are sold for more than what they are worth based on false appraisals.
Lenders knowingly lend more money than the borrower can afford to pay back.
Consumers are charged fees for services that are unnecessary and possibly even nonexistent.
Borrowers are targeted for cash-out refinance offers when it is known that they need the money due to medical, unemployment, or debt problems.
Borrowers are pressured to accept high-risk loans such as interest only payments, balloon loans, and steep pre-payment penalties.
Borrowers are charged higher interest rates based on their national origin or race rather than their credit history.
High-pressure sales tactics are used to sell home improvements while being financed at high interest rates.
Equity is “stripped” from homeowners’ homes by being convinced to refinance over and over again where there is not benefit to the homeowner.

Example Tactics Used

Someone tells you that in order to get a good deal to finance a home improvement you need to go with a particular lender.
You are told that by refinancing your home you can solve your credit or money problems.
The home you are considering buying for some reason costs a lot more than similar homes in the same neighborhood.
An investor or lender informs you that they are your only chance of obtaining a home loan or owning a home.
You are asked to sign a sales contract or loan document that is blank, not complete, or not accurate.
The costs or loan terms at closing are not what you had agreed to.
You are informed that the Federal Housing Administration insurance protects you against property defects or loan fraud – it does not.