Prior to signing paperwork it is always advisable to have it reviewed by an attorney.
Do not over state or falsify your income on a stated loan application. By doing so you are commiting loan fraud. If the loan is ever audited you can and will be held accountable for any and all false information you submit for a loan application.
There are federal and state laws governing how each party involved in a loan transaction should behave. Most of these regulations are contained in Uniform Residential Loan Application and the many disclosures you will receive in the initial stage of the loan application. Have your loan officer go over these laws with you to avoid unknowingly violating any of these statutes.
If you have been a victim of mortgage fraud from your mortgage broker, do not hesitate to file a complaint with your state's Department of Financial Institutions. If you visit their website, there will be forms that you can download to submit your complaint.
If you are applying online do not enter your SSN into a site unless you are 100% sure of its credibility. If you do enter information online such as SSN and financial information make sure the site has an SSL certificate. You will know this by the yellow lock at the bottom right of your computer screen. This certificate will encrypt your information making it unviewable to outside hackers and criminals. If you are dealing with an out of state company make sure they send you a loan package to sign that shows final rate and all closing fee's. This initial Good Faith Estimate should be very close to the final closing figures.
Check with your state's department of commerce or the appropriate state department that either licenses or handles mortgage broker/banker/lender issues. Make sure that the mortgage professional you are working with is accredited and who they say they are. Most states require loan officers to be licensed by the state however some do not. You can also check with the Better Business Bureau to see how many complaints the company you are working with has and how well they have handled those complaints. These items can help you to prevent mortgage fraud.
Reputable mortgage brokers charge rates and fees that do not vary based on age, gender, race, religion, or national origin. If you feel you have been discriminated against contact your state licensing authority to file a complaint.
If you ever get seriously behind in your mortgage payments and feel foreclosure looming be especially wary of companies offering assistance. Often these are scam-artists who swindle thousand’s from unknowing homeowners, sometimes leaving them penniless and homeless.
Never pay any fees without a written agreement stating exactly what services will be rendered for the fee. Also, find out up front if any part of the fee is refundable.
The most common form of mortgage fraud is occupancy fraud. An example of this is where the borrower misrepresents his intended use of the house by saying it is owner occupied when he really uses the property as a rental house. Investment loans carry a slightly higher interest rate because they are statistically more likely to end up in foreclosure. There are a few instances in which a family can legitimately have two primary residences: Ask your Loan Professional for details.
Do not hesitate to walk away from anyone suggesting you lie about anything on your loan application. Never sign any loan documents that have been left blank; these documents could be altered later.
Take the time to read each word of every document: they are important! You should be especially wary if you are ever rushed into signing a document. Pay attention to your “gut feelings” and know that no reputable broker should ever pressure you to sign before you are ready.
Do not attempt to hide anything from the lender. And do not present any information that is not true.
One common form of mortgage fraud is to try to make your income seem higher than it is. This usually involves an employer who is a friend aor family member lying to the lender when asked to verify employment and income.