As our economy grows more and more digitized, it’s become far too easy to fall victim to mortgaging schemes, for both the borrower and the lender. Here, at Choice Mortgage Bank, Inc., we’ve seen our far share of illegitimate schemes and at the end of the everyday, we like to make sure that we not only grow from it, but our employees, partners, and clients can learn from it too. So today, we’ve listed the four most common schemes in the South Florida lending market and compiled a way not only to identify them, but how to ward them off, as well as where to report them – because your safety is nothing to be lax about.

  • Identity Fraud

Notorious for being one of South Florida’s biggest scams, beyond just financial markets, identity fraud is only becoming more and more prominent as our economy shifts online, causing so much of our personal information to float around – often without our consent. The best way to prevent your information from being stolen is to verify the person, company, and inquiry that you’re providing for. Licensed lenders should never take your information over the phone, or through any other forms of communication, without explaining the cause for your information retrieval, as well as what they plan to do with it, and what you should expect next. Don’t be afraid to ask! The same goes for realtors, if you’re given dealing with a client who seems to be too young to have that high of an income, or the personal information doesn’t match up as you’re pulling credit reports, or speaking over the phone, make sure to ask for at least two forms of identification, it can never hurt to make sure you’re dealing with the right person.

 

  • Predatory Lending

Predatory lending occurs when lenders start pulling out all the brakes on signing a loan, without fully explain the terms & conditions. This may occur over the phone, over email, or any other form of communication that doesn’t rely on face-to-face meetings, where paperwork would have to be shown. If you’re ever offered a loan without as much as a credit check or a contract – there is no loan. Not only should you pull out of this scheme, you should immediately report the individual or group you’re speaking to, to the Federal Trade Commission (FTC), or your state’s attorney general’s office.

 

  • Upfront Fee Scam

If you’re ever paying an unknown fee or a “processing” fee for an overtly long application, this is one of the first signs of an upfront fee scam. Commonly linked with the identity theft scheme, borrowers hear no word of a loan, despite signing away all their information. The information usually given on the application can easily be found in the wrong hands, and before you know it, it’s your information being used in another fraudulent loan – not only hurting the clients, but the unsuspecting lenders as well. You should never be paying to get more money. Any newfound fees, or invoices, will always be voiced to you by your mortgaging professional.

 

  • Appraisal Fraud

Lastly, there is property flipping. More commonly known as appraisal fraud, since property flipping is not illegal: unless a fraudulent appraiser values a property for far more drastically than it’s worth, with the help of an equally fraudulent buyer, to trick the lender. This is common in refinancing, too. The best way to ensure an honest appraiser is to check their licensing, their past work, as well as past companies & individuals they’ve worked for. Most trustworthy, experienced professionals will have an online directory of their past projects, that you can search through at any time and any place, to verify their ability.

 

While this may not be all the tricky schemes out there, recognizing the small hints can go a long way. It goes without saying that being here at Choice Mortgage Bank, Inc. already erases a long risk of doing your mortgage independently. Not only do we give you access to experienced, licensed brokers who can answer any questions or concerns, we make sure all the information & resources are secure – that means no fraudulent cases with your name on it.  For more information our safety procedures, and why our brokers are the safest bet for you, your family, and your future, call us today.

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