Avoiding Mortgage Loan Fraud

Mortgage loan fraud is becoming rampant and one day you might be surprised to find yourself a victim. To avoid these scams, here are some facts that you need to know.

The Red Flags of Loan Fraud

Scammers use various fraud tactics to lure individuals in their traps. Beware when:

  • You are told to sign blank loan forms or an agent recommends that you provide false information on the documents in order for you to get approved of a house that you cannot afford.
  • You are required to make initial mortgage payments that are paid directly to the person negotiating between you and the lender.
  • You are required to pay fees in order for you to qualify for a government-sponsored mortgage loan program.

How to Protect Yourself from Fraud

Educating yourself about the basics of home loans is the key to avoiding mortgage loan fraud. The US Department of Housing and Development (HUD) offers a homeownership education course that you can attend. You can also contact consulting agencies in your locality approved by HUD. Moreover, go for reputable lenders and agents whose trustworthiness in the business is proven and tested in time. Ask for references from the counseling agency.