There are many types of mortgage fraud.
Firstly, understand that mortgage fraud can come in many ways. The main types of mortgage fraud are:
- mortgage fraud for housing
- mortgage fraud for profit
- Title Fraud
- mortgage foreclosure fraud
Typically, in the market, brokers witness mortgage fraud for housing. This happens when a client knowingly, or unknowingly performs an application where documents are doctored up. The term ushering is used in this case type. Ushering involves documents being pushed through a system of fraud; from the application creation to the end. The clients are also ushered, or coached in regard to what to do and say. Unfortunately, many of the victims of this type of fraud are first-time home buyers. First-time home buyers generally don’t know the first thing about buying a home. Regretfully, they put their trust in someone that is meant to be trusted in a moment of great need. This great need is their new dream home.
There are other forms of fraud. Although not as prevalent, still needs to be mentioned
- Fraud for profit mainly deals with the value of the home. Someone who inflates the cost of a home to a buyer or a lender to gain access to more equity in the home.
- Title Fraud is a doozy. Typically, this type of fraud occurs when a person steals the identity of another person to get on the title of a home.
- Foreclosure fraud happens to a borrower, who is behind on payments. The borrower gets taken advantage of in their time of duress. Generally, this scheme involves a scammer who offers help, and then ultimately doesn’t help. This leaves the borrower even more cash-strapped, and still in the foreclosure process. Thankfully, foreclosures in Canada are minimal as most homes go power of sale.
Consequences of performing mortgage fraud
We all can picture the fallout of performing fraud. Your house can be taken from you by legal processes. You can also be fined or go to jail in some instances.
Why the uneasy feeling?
We all know doing a mortgage is stressful sometimes. All the moving parts and the process to get approved can be arduous. If you are feeling something is wrong in the process this feeling should be helped by advice NOT SELLING. If you feel there is too much selling going on in your mortgage process then there is something going on. Selling the best rate is easy and giving proper advice to help a client out is what we do at Mortgage Suite. There is minimal coaching or undisclosed information. Always choose someone you communicate well with, and that is providing all the knowledge of what you are doing.
