Loan Documentation Fraud includes providing inaccurate information when applying for a loan to purchase property. Common information that is altered is income, assets, employment status, etc. This allows the buyer to get a lower rate and better loan terms. Other types of this fraud include forging someone else's information, or pretending to be a financial institution so a down payment can be collected. As soon as this happens they disappear. Never falsify information when applying for a loan, even if you are encouraged to do so by another party.
photo credit: NobMouse
Loan Documentation Fraud
Loan Documentation Fraud includes providing inaccurate information when applying for a loan to purchase property. Common information that is altered is income, assets, employment status, etc. This allows the buyer to get a lower rate and better loan terms. Other types of this fraud include forging someone else's information, or pretending to be a financial institution so a down payment can be collected. As soon as this happens they disappear. Never falsify information when applying for a loan, even if you are encouraged to do so by another party.
photo credit: NobMouse
"Flipping" a home is when you purchase property as an asset then quickly re-sell it for a profit. There are different types of flipping. Generally, flipping is legal. However, there has been an increase in illegal flipping. This is when a recently purchased property is re-sold for an inflated value. Usually only small cosmetic improvements have been made before re-selling it. This scheme involves the appraiser, a mortgage originator and the closing agent. The real estate appraiser is the key player, because for this scheme to work the property has to be appraised for more than it is worth.
The Uniform Standards of Professional Appraisal Practice governs real estate appraisers. If you suspect a flipping scheme you can contact them before making any real estate decisions.