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5 Ways to Prevent Mortgage Loan Fraud


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TERMINOLOGY

Mortgage loan fraud is a prevalent reality that you should be aware of. Consider the following five tips suggested by the U.S. Department of Housing and Urban Development that can help you prevent being accused of mortgage loan fraud, and avoid being taken advantage of when buying a property.

  1. Be completely honest on your application. You can be charged in a court of law if you fill out false information regarding your income, down payment source, debt information, length of employment or any other required information. Tell the truth.

  2. Check references before you hire an agent or broker to assist you. Consider several candidates before making a decision.

  3. Compare the costs of several different lenders and loan options. Be wary of anyone who tries to limit you to only one lender or one option.

  4. Read everything carefully before you sign. Never put your signature on a document that you do not understand, or on any blank documents. Be sure to mark any blank areas as "not applicable" so that the forms cannot be altered without your knowledge.

  5. Be honest and clear about the property use. If you are not going to live in the house (for instance, if you plan to rent it out or remodel and resell) make sure that this is clear. This is important information, and lying about it or not disclosing your intention in purchasing the property is a criminal offense.