Mortgage fraud comes in all forms. One that is common is when a seller is desperate and sells via the contract for deed or another seller financed method. While at the same time he has a mortgage currently that has a clause for if he were to sell early then the mortgage would have to be paid off first. Instead of telling the lender he simply sells via a land contract to get around the clause. By doing this he is committing fraud and can face changes and fines. The buyer can also lose all of the money they put into the deal and the property as well.
If you suspect mortgage fraud you will want to contact the local FBI office and report it so they can investigate.
Other mortgage fraud can involve having a false appraisal made so that the buyer can get more money out of the property than it is worth. This used to be confused with flipping which is perfectly legal.More Articles