One of the most frequent types of mortgage fraud involves a fraudster acquiring a property and artificially inflating its value through a series of sales and resales. They then secure a mortgage based on the inflated price, leaving lenders and buyers at risk.

Red Flags to Watch For

Be cautious if you encounter any of the following:

• Someone offers you money to use your name and credit to obtain a mortgage
• You’re encouraged to provide false information on a mortgage application
• You’re asked to leave signature lines or other sections of your mortgage application blank
• A seller or investment advisor discourages you from inspecting the property before purchase
• The seller or developer offers a rebate on closing that isn’t disclosed to your lender

Title Fraud: A Costly Scam

Another major concern is title fraud, which is a form of identity theft. This occurs when a fraudster, using false identification, forges documents to transfer your property into their name. They then take out a new mortgage on your home, collect the funds, and disappear—leaving you to deal with the consequences when your lender starts foreclosure proceedings.

How to Protect Yourself from Title Fraud

• Always visit the property you’re purchasing in person.
• Compare local listings to ensure the asking price is reasonable.
• Work with a licensed real estate agent.
• Be cautious of realtors or mortgage professionals with a financial stake in the deal.
• Request a copy of the land title or conduct a historical title search.
• Include a professional appraisal in the offer to purchase.
• Require a home inspection to check for hidden issues.
• Ask for receipts for recent renovations to verify legitimacy.
• Ensure your deposit is held in trust for added security.
• Consider title insurance—the best time to get it is before fraud occurs, not after.

Stay Vigilant and Take Action

Fraud can have devastating financial consequences, but staying proactive and informed is your best defense. If you suspect fraudulent activity, act quickly—report it to the authorities and take steps to protect your assets.

Knowledge is power, and by staying alert, you can keep your mortgage and finances secure.

Monitoring your credit report can also help stay ahead of any fraud activity pertaining to identity theft!