How is real estate mortgage fraud done?


There are many ways for committing a real estate mortgage fraud. Basically, mortgage frauds are done with the purpose to make profit, or purchase property.

Real estate mortgage fraud begins with falsification.

  1. The loan applicant lies about their income, their job, or they have paired up with the seller and inflated the house value.
  2. House appraisal has to fit everybody's expectations - the realtor and broker want their commission, the seller wants to sell the house, the buyer wants to get a house. The appraiser is the person, holding the answer and imagine the pressure over them.
  3. Credit reports, title insurance and tax returns are easy to falsify, especially with the right software and using stated income or no doc loans.

Property flipping can be a real estate fraud, with which someone buys a rotten house, makes cheap repairs and sells it for an inflated price. It is difficult to distinguish the fraud from a legitimate flipping as many real estate investors are buying fixer-uppers and do manage to sell them big.

Also, real estate investors sometimes declare they are buying a primary residence, to make use of higher LTV and lower rate loans.

Mortgage rates hit their lowest since 1955. Ask the home loan experts we recommend Quicken Loans how to take advantage of them.
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