Mortgage fraud, how to protect yourself

Mortgage fraud, how to protect yourself. Mortgages and home loans are products most of us know so little about. We don’t buy homes every day and in a typical lifetime you are not likely to take on many mortgages. However mortgages are the biggest investment and expenditure any of us is likely to make. A market where each sale costs hundreds of thousands of dollars and customers are typically ignorant of the features and specifications of the product, is a dream playground for fraudsters.

What can you do?

Your best defense is knowledge. Before you sign anything, become an expert in home loans. This is not as difficult as mortgage brokers would like to make you think. You don’t need to be able to write text books on equity finance (most of the brokers you will meet, couldn’t either) but you do need to know the basic principles that will regulate the biggest investment of your life. Outright fraud is not likely to hit you if you keep within reputable companies that have a lot to lose from a scam scandal. However companies are made of individuals who are often under great pressure to make a buck from commissions. Having said that, don’t be paranoid, just be smart and check your bases before committing yourself.

Ask for a second opinion.

There are a whole plethora of agencies that protect you, the customer. Because housing is such a basic necessity, mortgage fraud attacks the very basis of a country’s financial stability. Therefore countries invest heavily on regulating and protecting customers. This is especially the case under the current economic crisis. It would be smart to talk to a customer protection agency before you take on any mortgage. Reputable banks will even suggest an independent agency that will advice you on your best options and review your mortgage.

Don’t hurry, take your time!

One of the oldest tricks of fraudulent mortgage brokers is to pressure buyers and whisk them to closing table in one day or three day closings. Just like a conjurer relies on speed and sleight of hand to distract the viewers, fraudulent or unscrupulous mortgage brokers will bully you into speedy operations without giving you a chance to check your options.

It must be emphasized that only you can allow them to do that. You are the client, you are in control.

A good advice is to prequalify for your mortgage with various companies before you have found your home. This way you can compare the pros and cons of each mortgage. It will also protect you from fraud as you can compare the choices and fees of various mortgage providers.

This article is not designed to scare you away from mortgages and home loans. Quite the opposite, the vast majority of banks and finance companies just want to make an honest buck by providing you a service you need. It would be sad that as in so many walks of life the dishonest few spoil it for the rest.

Be smart, arm yourself with knowledge, understand your choices, compare your options and get the best mortgage you can.