Question:

How to recognize rent-to-steal and straw buyers types of mortgage fraud?

Answer:

Why are so many types of mortgage fraud flourishing? The housing market being almost dry, there is a lot of pressure on all involved in the home loan business to bring in profit. And this is how documents are readily pushed through until approval is gained while they otherwise wouldn't pass.

Rent-to-Steal: a Profitable Type of Mortgage Fraud

You have a nice second house to rent. A renter with the right documents shows up and there you are - you sign the lease documents and they have your name and signature on it. The renter now forges documents with your name and signature and applies for several loans at the same time with your house as the collateral. Your rental checks keep coming in, and one day several lenders show up and claim title to your house.

Straw Buyer Rings: a Type of Large-Scale Mortgage Fraud

The con artist approaches naive people from the community and asks them for their names and personal data and pays them cash in return for the small favor. Then the fraudster obtains mortgage loans in the names of the straw buyers, pays them some cash and disappears. It is usually the straw buyers who end up in court, rather than the con artist.

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