What is Mortgage Fraud in Florida?
Back in the mid-2000s, the real estate industry was booming, and that led to some serious instances of mortgage fraud. In some cases, it’s the borrower who was committing the fraud, but in other situations, it was the lender who was engaging in illegal practices.
Unfortunately, mortgage fraud is on the rise again. According to a Washington Post article, one in 109 mortgage applications during the second quarter of 2018 had some element of fraud. This represents a 12.4% increase from the year before. Unfortunately, Florida was one of three states with the largest increase in yearly mortgage fraud.
Common Types of Borrower Mortgage Fraud
There are a number of different types of mortgage fraud. Some of these can include:
Transaction Fraud: Transaction fraud is when a down payment is falsified or someone misrepresents an undisclosed agreement between parties.
Income Fraud: Income fraud is when someone gives a false number related to their income or its source.
Property Fraud: When someone misrepresents the property itself or the value, it’s property fraud.
Occupancy Fraud: when someone is dishonest on whether or not they intend to live in the property full time or use it as an investment, it’s known as occupancy fraud.
Identity Fraud: This is when someone uses a fake identity or credit history.
Failure to Disclose Real Estate Debt: Some applicants choose to withhold information about other mortgage debt, a lien, or even a prior foreclosure.
One potential reason that mortgage fraud is on the rise again is because home prices are rising as well as the demand for homes. This is pushing some borrowers to say what they think they need to in order to get the loan approved.
Mortgage Fraud by Professionals
Unfortunately, mortgage fraud is not limited to the borrowers trying to get a home. In some cases, the mortgage fraud is committed by the real estate agents, the lenders, or someone else involved in the sale. Some borrowers and lenders are in cahoots and have worked together in order to commit mortgage fraud with the sole purpose of financial gain.
Some scams involve flipping rings where all the parties are working together to scam people out of money or are using funds obtained fraudulently in order to complete the flip. The Florida Attorney General’s office is in charge of investigating any businesses that defrauds or deceives a consumer along the way. They recommend consumers be wary of high-pressure sales tactics, and they should not have to pay any upfront fees.
Contact a Florida Real Estate Attorney
While the person committing mortgage fraud will likely be charged criminally, you still need to consider a civil lawsuit to recover damages. To help reduce your chances of being the victim of a real estate or mortgage scam, it’s important to work with a skilled West Palm Beach real estate attorney throughout the process. At the Law Offices of Larry E. Bray, P.A., we can assist with all aspects of residential and commercial real estate transactions to help reduce the risk of someone trying to scam you. Contact our West Palm Beach office today at 561-571-8970 to schedule an initial consultation.