What Is Mortgage Fraud?

Mortgage fraud is intentionally deceiving the buyer or lender to purchase, insure, fund, or mortgage a property. The two main types of mortgage fraud include fraud for profit and fraud for housing.

Fraud for Profit

Fraud for profit is usually committed by the industry insiders such as brokers, bank officials, attorneys, appraisers, and others. They use their experience and knowledge of banking and real estate. Then, they take advantage of the homeowners to intentionally misuse them. They generally steal the funds and profits here.

Fraud for Housing

As the name says, the borrowers’ intention here is to acquire ownership of the house. They usually submit false documents about their income, mortgage applications, appraised values, and more. Other Common Types of Mortgage Fraud

There are other mortgage fraud schemes that can be conducted by either party including:

Occupancy Fraud

The owner claims that the house is self-occupied to get a favorable bank status. However, in reality, the house would be occupied by someone else like tenants, relatives, or others.

Identity Fraud

The borrower forges the identity documents to claim ownership of the property to get money. Illegal House-Flipping Fraud

One of the classic mortgage frauds that involve the purchase of a property under the market value

Appraisal Fraud

The appraisers generally work together with the other people involved in the mortgage and sale of a property. Here the appraiser deliberately increases the value of the sale to get more commission out of it.

Predatory Loans

Here the mortgage provider makes the applicant provide false information such as income, assets, expenses, and down payment.

How to Prevent Mortgage Fraud?

IDISS provides dedicated loans and mortgage fraud prevention through the perfect investigation module. We have tie-ups with experts in the real estate industry and we verify every document required. Our best private detectives analyze and do the basic background checks of both parties involved.