If you are a first-time homebuyer that has not gone through the process of getting a mortgage before, it’s important to be careful. There are plenty of people out there looking to scam homebuyers with their mortgage fraud schemes. It always pays to know what to look out for so that you can avoid getting taken advantage of. Even experienced homebuyers can fall victim to mortgage scammers, which is why we’ve put together the following article that provides details on the most common mortgage fraud schemes to look out for when you are buying a house. Remember that you can always reach out to All American Financial Services to work with an honest and professional company for all of your financing needs.
1. Saving You From Foreclosure
Dealing with home foreclosure is a scary and stressful time for homeowners. One classic mortgage scheme that applies more to homeowners than homebuyers is when a scammer offers to pay off the debt on a home and then rent it back from the investor. The scammers ask the homeowner to transfer the title to them. The homeowner is then evicted from their home and the scammer gets to pocket the home equity. You should absolutely recognize this scam and avoid it at all costs. When things seem like they are too good to be true, they usually are!
2. Straw Buyer Purchases
A straw buyer is someone that makes the home purchase on behalf of someone who can’t afford the purchase themselves. If a straw buyer is used to help someone purchase a property that they can’t normally afford, it is illegal. This can lead to trouble with the law or eviction if you aren’t careful. If you can’t afford a home or can’t get the financing you need to purchase a home, you should work hard to save up your money and improve your credit score. You can always reach out to All American Financial Services for a loan as well.
3. Falsifying Documents for the Purchase
The last mortgage scheme we will touch on is falsifying documents. If you are ever asked to falsify documents or information like your income, you should say no immediately and avoid working with that person. Giving false information is illegal and can lead to serious consequences if you aren’t careful. Also, avoid signing a blank document, as this can come back to haunt you if you aren’t careful.
If you are ever approached by someone trying to convince you to do one of the things mentioned above, it’s always a good idea to report it immediately. Even if you don’t fall victim to mortgage fraud, other people might. You are helping to protect others from these schemes by reporting it. Remember to always do your research about a mortgage loan provider prior to signing up for anything. You can always reach out to All American Financial Services for all of your mortgage service needs.