The Usual Suspects in Frauds in Investment Property Mortgage Loans

Posted on: December 2, 2011

Categories: Other Articles

Author: lbuen

Avoid Frauds in Investment Property Mortgage Loans

. You can be involved in these frauds in two ways: as the victim, or as the offender. You do not want to be in any of these circumstances, that is why you must know how to avoid it. To help you do this, let us acquaint ourselves with the possible perpetrators of the illicit activities and how they carry out their schemes.

Who’s Who in Frauds in Investment Property Mortgage Loans

1. The Borrower

Be careful with what you declare in your personal information. Tweaking minor details a little here and a little there may just be mere white lies to you but they can possibly embroil you in mortgage fraud. You can possibly be implicated in a mortgage fraud by deliberately falsifying information, facts and figures, or by omitting pertinent details about your income and employment, debt and credit, or the value and condition of the property. Why would you do these? This is so that you can obtain housing either for personal use or to be used as an investment property to resell for profit or to rent out to tenants for rental income. By window dressing your information as a would-be homeowner, you can obtain a housing loan even if you do not actually qualify. As a real estate investor, you could fudge the details about the property so that you can maximize profits in your property investment.

2. Industry Professionals

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Investment Property Mortgage Loans Image by newneonunion via Flickr

At the other end of the spectrum of investment property mortgage loans fraud is the scheming lender who cooks pertinent details so that they can obtain business with you even if you do not qualify. Or they cook their income figures to falsely demonstrate their capacity to assume more debt. These schemes played a significant part to the economic malaise of the country.

3. Other Players in the Industry

Besides lenders, other industry players involved in the real estate transaction process, such as the mortgage broker, real estate agent, real estate appraiser, builder, property inspector, credit/debt counselor, insurance agent, title company, escrow agent, or attorney can also commit these frauds to maximize profits on the loan transaction. These guys can also connive to double-cross you, your lender or underwriter so that they can get the maximum fees they can get and they split the profits on all services related to the mortgage.

Investment property mortgage loans are an excellent source of funding for real estate investors. However, with all the frauds taking place in the market, be careful who you deal with or you may fall victim to these predators or could be tempted to take part in these illegal pursuits.

 The Usual Suspects in Frauds in Investment Property Mortgage Loans
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