Mortgage Fraud Devastating for Victims

San Jose, CASo, you have purchased your home, all the paperwork has gone through and everything seems fantastic with your life. You have nothing to worry about--until you discover that the company that holds your mortgage was involved in mortgage fraud. Now, your payments are far higher than you could ever afford and you are facing foreclosure all because of mortgage loan fraud that you were not even aware of.

Unfortunately, you are not alone. Many people purchased homes only to discover that their mortgage documents were filed fraudulently. In some cases, the mortgage applicant's salary was increased to make it look like he or she could afford a more expensive home than was realistic. Of course, this means that the mortgage payments are higher than the applicant can afford, too, which means it is much more likely the applicant will default on the mortgage loan.

Many people believe that mortgage fraud is only committed by people attempting to borrow money from a lender. They think of people who lie about their income or falsify occupancy of the home (where the borrower says he will live in the home when really it has been purchased as an investment property). Some borrowers also falsify their liabilities, such as newly acquired credit card debt, so that it appears that they owe less to other lenders than they actually do. While it is true that these types of fraud all happen, there are cases where the loan officer or another agent for the lender falsifies the borrower's information.

In some situations, the borrower knows about this fraud and agrees to go along with it for the sake of getting the home she loves. But in other cases, the borrower may not be aware that anything illegal has transpired until it is too late to do anything about it. The borrower then faces the terrible prospect of losing the home that she loves, through no fault of her own.

It is a sad but true situation. Some people have been lured into mortgages that they could not possibly afford and are now paying the price. In Connecticut, insurance regulators revoked the license of an insurance agent who was convicted of fraud related to a mortgage he brokered. The agent provided false financial information and documents when he brokered the loan from a lender. The couple who received the mortgage lost the home in a foreclosure.

Mortgage fraud is also linked to identity theft, with some fraudsters stealing information from homeowners to take out mortgages, or second mortgages, in those homeowners' names. Recently, a 69-year-old man was charged with 7 counts of false acknowledgment by a notary public. According to the charges, the man, who worked for a roofing company, asked the company's clients to sign a payment contract. The man then had the signatures notarized and used them to get second mortgages without the homeowners' knowledge.

There are a variety of ways in which a homeowner can fall victim to a mortgage scam. Unfortunately, most do not discover the scam until it is almost too late to do anything about it. By that time, your home is in foreclosure and creditors are beating down your door, but you have no idea what could possibly have gone wrong. All you know is that your dream home has turned into a nightmare.