Protect Yourself Against Mortgage Fraud

The neighbors were concerned. In their upscale New Albany, Ohio neighborhood, six $350,000 homes had been sold in the past six months, at least the homes all displayed "sold" signs in their front yards. But no one had moved in, no one had been around to mow the grass, you couldn't see any furniture when you peeked in the window, calls to the realty number displayed on the sold signs got a disconnect message. It was more than curious. It was downright worrisome. Afraid the neglected homes would negatively affect their property values and diminish their own efforts to sell, the neighbors called police.

A lengthy investigation turned up a local mortgage fraud ring. Buying quarter to half million dollar homes with creative financing packages and no money down, the ring had pocketed the loan money, abandoned the homes, defaulted on the mortgages and made a ton of money in the process. It was shocking!

It always is. No one expects to be a victim of mortgage fraud. That's something that happens to the other guy. Well a lot of "other guys" just like you have been duped by the perpetrators of mortgage fraud. In the past year mortgage default and foreclosures have become rampant across the country, jumping 47% this spring compared to a year ago, according to RealtyTrac, Inc. Foreclosures are highest among borrowers with marginal credit who were enticed to take out high-priced loans on homes they ultimately couldn't afford. The crisis has lead Senators Sherrod Brown (Ohio), Charles Schumer (New York) and Bob Casey (Pennsylvania) to introduce a bill that would mandate tougher federal standards for mortgage lenders and provide funding for consumer programs to educate homeowners and help them avoid foreclosure.

Every homeowner needs to protect himself against mortgage fraud, says veteran Maryland realtor John Day. He urges buyers to think before they sign on the dotted line.

• Don't falsify information on a loan application or allow yourself to be a party to false information provided by a mortgage broker or lender.
• Don't participate in falsely inflating a home's appraisal.
• Don't sign fake supporting documentation for your loan and don't ever sign a blank form.
• Don't purchase loans disguised as refinances.
• Don't trust businesses or websites that promise to boost your credit score for a fee.

Good advice for all homeowners -- buyers and sellers. Another piece of advice, DO work with an honest, reputable, qualified real estate agent like John Day. A lead agent at prestigious Long & Foster Realtors, John will guide you through the confusing process of buying or selling a home in Maryland or the Washington DC metro area. Visit John’s Homes Buy Day website for great tips and to check out the latest listings. If you’re buying or selling a home, John Day is your key to success.