Frauds are met on a daily basis in many fields, including in the real estate sector and each of us should pay attention to any kind of transaction, no matter the sum of money involved. Selling and buying properties are the type of transactions that can be easily frauded through varied illegal schemes. It is important to know that a real estate due diligence plus the support of a lawyer are, in most of the cases, proper solutions for avoiding a bad real estate transaction.
Types of mortgage frauds – how you can avoid fraudsters
Mortgage frauds develop in a multitude of ways and it is important to pay attention to these aspects and avoid them as much as possible. The following types of mortgage frauds are often met in the real estate sector:
1. Property flipping refers to the type of properties that are purchased at a dishonestly overstated value and then rapidly sold;
2. There are cases of mortgage loans where the stolen identity of a person is used, without for him/her to know;
3. Fraudulent documentation is used for loan applications,
4. In the case of equity skimming, a person uses a straw buyer and also untruthful income documents when applying for a mortgage.
Mortgage fraud cases mostly appear in large real estate transactions involving huge amounts of money and more than just one person is involved in such a deal. The above-mentioned types of mortgage frauds often end with victims who eventually discover that they made a bad deal and lost high amounts of money. It is impetuous, as an investor, to keep in mind the fact that such cases can be avoided if legal support is requested. There are many experienced lawyers in real estate transactions who can propose real estate due diligence methods and a serious verification of a property before a deal is concluded.
How can you protect yourself from being a victim of mortgage fraud?
There is no doubt that authorities in any country can make serious recommendations for persons to avoid transforming themselves into real mortgage fraud victims. As an example in this sense, they should solicit complete information about the property they wish to purchase and ask for the support of a real estate agent who is a professional in this field and who can verify the property from a taxation point of view, licenses, permits, background history and many more. Also, it is important for buyers to solicit some verifications in terms of property value and check similar properties. In the case of real estate due diligence, a report in this sense will reveal if there are any unsolved litigations and if the property has a clear background history.