It is true that most mortgage applications push through without a glitch. However, there are some lenders and borrowers who do commit fraud to make things more favorable for them. While it may seem harmless at first, mortgage fraud could easily turn into a huge mess later on.
It is not going to be easy for a lender to commit fraud but as a borrower, you should still be familiar with some tactics that are often done. One of these is the thing that some lenders do wherein they discuss and offer a set of terms that is agreeable to the borrower only to change it on the documents. They rely on the volume of documentation for a loan. Sadly, there are a lot of borrowers who trust easily and just glance over the writings or even just look for the part where they need to sign.
How to Protect Yourself: Know common mortgage terms beforehand. Read all the documents that you are handed before signing any. Do not rush while doing this and take as much time as it is necessary. Make sure you understand everything that is written on those documents. If there are things you are unsure of or are not familiar with, call your agent or your lawyer for clarification and assistance.
There are also incidents wherein home builders commit fraud by cheating on buyers. They deposit cheques into their own bank accounts when they are meant to pay back construction loans to clear titles. In the end, homeowners end up with more mortgage than they are supposed to be responsible for and at risk of foreclosures. What is supposed to be a dream come true could be a total nightmare.
How to Protect Yourself: Be wary when contractors, agents, or any other party requests for cash payments. Be sure that any monetary transaction is paid from the established account which is maintained by a lender for the borrower. You should never ever pay directly with cash to anyone. You can also discuss everything with litigators who specialize in these things.
Do not get too excited by the thought of finally owning a home of your own that you let down your guard. Work only with people who have been trusted by clients for years. Do your own research and do not just rely on what people tell you. Be a smart buyer so you won’t have any regrets later.