Money Matters How to Protect Yourself Against Mortgage Fraud By Brian O’Connell Mortgage fraud occurs when a potential homebuyer, seller, or lender lies or omits key information that leads to a mortgage loan approval or terms that the applicant wouldnΓÇÖt normally qualify to receive. And unwitting consumers can find themselves caught in the midst of such scams by unscrupulous lenders or brokers.. For homebuyers, the key to avoiding mortgage fraud is educate yourself, and never sign a mortgage application form or home appraisal form until youΓÇÖre certain all the informationΓÇöespecially personal financial dataΓÇöis accurate. Here are some steps to take to protect yourself: Stick to Credible Referrals When youΓÇÖre buying a home, you need to trust your mortgage partners. Build that trust with referrals from family, neighbors, friends, and especially real estate professionals whoΓÇÖll vouch for a lender, broker, appraiser, or real estate agent. If you have an established relationship with a bank or financial institution, leverage those relationships as well. YouΓÇÖll be more prepared if you get pre-approved for a mortgage by a reputable lender so you make the homebuying process smoother. Avoid Aggressive Mortgage Lenders Mortgage lenders who push you hard to sign on the dotted line should be avoided. ThatΓÇÖs especially the case with mortgage lenders who tout no-money down or ΓÇ£low or no documentΓÇ¥ loans. These loans may or may not fall into the ΓÇ£fraudulent category,ΓÇ¥ depending on state-by-state mortgage loan statutes, but they may get you a loan with high interest rates that could increase over time, and high mortgage fees that only add to your mortgage loan debt burden. If anyone suggests that you lie on a mortgage application, donΓÇÖt. ThatΓÇÖs an immediate red flag to avoid working with that person or firm. DonΓÇÖt Sign Any Shady Documents Never sign a mortgage loan document that is either blank, has blank lines, or contains questionable or unfamiliar data. Doing so could lead you down the path to mortgage fraud. Instead, consult with a trusted real estate professional or legal expert to review the mortgage loan document. Check Your Credit Additionally, since mortgage fraud may also involve identity theft, you want to regularly review your credit report for any new accounts you donΓÇÖt recognize. Another way to keep an eye out for new accounts is to use an identity protection product like Experian IdentityWorks, which provides alerts when new accounts or inquiries are added to your credit report. You also get access to a dedicated fraud resolution agent if youΓÇÖre a victim of identity theft. Be Practical Buying a house can be an emotional experience. DonΓÇÖt let your desire to buy your first place or dream home cloud your good judgment. Take your time with assessing all people you work with from your real estate agent to your buyer. If thereΓÇÖs something you donΓÇÖt feel good about, seek a trusted advisor. Here’s more information on mortgage fraud and how to stay protected.