We know by now that identity thieves are reaching far beyond credit card shopping sprees. A major risk for homeowners nowadays is mortgage fraud, which has been a huge contributor to this nation’s housing crisis. The Federal Bureau of Investigation (FBI) reported that 67,190 mortgage fraud suspicious activity reports (SARs) were filed in 2009 with more than $1.5 billion in losses.

The FBI also estimates annual losses between $4 – 6 billion, and statistics show that many victims of mortgage fraud do not discover misrepresentation or other fraudulent activity until almost two years after it has occurred.

Mortgage fraud schemes, like “liar” loans and application misrepresentations, are tough to spot and even harder to stop… but not impossible.

Mortgage fraud is preventable and there are key steps consumers can take now to stay safe from the threats. So as home buying season kicks off this month, educate yourself. Below is a list of top 10 consumer tips for detecting and avoiding a mortgage fraud scheme.

Top 10 Consumer Tips for Combating Mortgage Fraud:

1. Periodically check all of your home information with the recorder of deeds in your county.  If you discover any paperwork you don’t recognize, immediately contact your mortgage company and county authorities.
2. If you receive any statements or similar information from a mortgage company that is not yours, read the documents carefully and contact the company immediately to alert them to a discrepancy.
3. Beware of any offer that promises to “rescue” you from foreclosure, including loan modification programs that purport to be affiliated or approved by the government.  Do not make payments to any entity other than your mortgage lender or cease communications with your lender.
4. If you are at risk of foreclosure, your mortgage lender should be your starting point.  If you are considering third parties, make sure you transact only with qualified and approved credit counselors.
5. Get referrals for realtors and mortgage banking professionals. Check the licenses of the industry professionals and their company with state and local regulatory agencies.
6. Don’t assume that your lender has captured all of your personal information accurately. Check your application against the final loan documents to ensure that the information is correct and complete.
7. Understand what you are signing and agreeing to and do not sign any blank documents or similarly, forms that contain blank spaces. If you do not understand an agreement, re-read the documents or seek assistance from an attorney or trusted third party.
8. Check your credit report and public records information before refinancing your mortgage or purchasing a home and check again a few months later to make sure that if your personal information was stolen, it is not being used against you.
9. Report any suspicious activity to relevant federal agencies like the Federal Trade Commission as well as your local and state consumer protection agencies.
10. Finally, just as with any other offer, if a mortgage opportunity sounds too good to be true, it probably is!

Related posts:

1. Be Prepared to Establish Your ID When Red Flag Rules Go into Effect
2. Footprints to a College Graduate’s Credit Profile (Part II)
3. Making the Big Move…Safely
4. Why Black Friday Could Be a Red Carpet for Scammers
5. Footprints to a College Graduate’s Profile (Part III)