How can you avoid mortgage fraud?

To avoid mortgage fraud, it's crucial to be vigilant and cautious, especially during the real estate transaction process where large sums of money are involved. Here are some key tips shared by Brad Barrett and others:

1. Be Skeptical of Lookalike Letters: After closing on a house, you may receive numerous letters from entities that appear similar to your mortgage company. These letters might offer services like mortgage insurance or deed protection but are actually scams designed to deceive you into paying unnecessary fees 1.

2. Understand Wire Instructions: For safe transactions, avoid relying solely on email for wire instructions. Scammers can compromise emails of your real estate agent, attorney, or title company to send fraudulent instructions. Always verify wire instructions through trusted methods like direct phone calls or confirmed physical documents 2.

3. Follow Legal Residency Requirements: To avoid committing mortgage fraud unintentionally, adhere to stipulations like living in a property for a required duration (usually one year) if you've purchased it as a primary residence with a low down payment. This is a common requirement from lenders to consider the loan for a primary residence 3.

   Real Estate Insights

   Chuck Jaffe

   Jonathan Mendosa

   Jonathan shares cautionary tales about real estate transactions, warning against sharks preying on unsuspecting homeowners. He highlights the importance of vigilance to avoid falling victim to scams in the industry.

   

   ChooseFI

   146R | Fork in the Road

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By following these precautions, you can secure your transaction and avoid falling victim to mortgage fraud.