Thursday, April 29, 2010

Be Your Own Best Advocate: Mortgage Fraud Prevention

Mortgage Fraud: Education Key to Prevention

Mortgage fraud is a giant problem in certain parts of the country. Whether your institution is located in the worst states for it or not, you have to realize that this type of fraud is everywhere. And the best way to stop it is by preventing your customers from falling for the unscrupulous scammers looking to cash in on other people's misfortune.

The scenario is a familiar one: Desperate homeowners who are falling behind on mortgage payments want to find help. They find a scammer instead.

Examples of common mortgage fraud schemes are outlined in the booklet, such as signing incomplete documents or making payments for foreclosure rescue services that are otherwise free through government programs, such as the Homeownership Preservation Foundation and their HOPE Hotline.

Common mortgage fraud scams include property flipping, real estate investment schemes and reverse mortgage scams. The booklet also includes examples of foreclosure rescue scams that prey upon individuals who are in danger of losing their homes, and recommends that consumers contact their lender or non-profit organizations, which can assist the consumer before they fall victim to this fraud.

One resource institutions can point their customers and consumers to is the new booklet Be Your Own Best Advocate: Mortgage Fraud Prevention by BITS, the technology division of the Financial Services Roundtable. The booklet educates consumers about mortgage fraud and gives simple solutions they can use to protect themselves. As Leigh Williams, President of BITS notes in a recent interview, "Preventing fraud in products such as mortgage lending is an issue for many institutions. Anything that hurts a homeowner is bad for the homeowner and the institutions."

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