What Are Mortgage Fraud and Risks?

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What Are Mortgage Fraud and Risks?

Mortgage-related concerns interest more and more Americans every year. At the same time, there are misconceptions that still exist about mortgage lending, mortgage risks, and how people who decide to apply for a loan can avoid falling into the trap of fraudsters.

What to Pay Attention to When Applying for a Mortgage?

It is obvious that in the first place you should pay attention to the interest rate, the terms and payment schedule of the loan, the availability of commissions, the responsibility for violating the payment schedule, the currency of the loan, types of insurance, and so on. All conditions are important and necessary.

More often the attention is concentrated on the interest rate, which depends on the income and expenses of the borrower, the requested loan amount and term, work experience, property and even social status, occupation, consent to personal insurance, the birth of children, as well as many other individual factors. However, in any case, the bank forms an individual offer to the borrower, based on specific, inherent only to his criteria.

Therefore, it is much more important to get acquainted with the mortgage terms of the bank of your choice, to clarify the meaning of terms with brokers and to correlate the requirements for servicing the loan with your capabilities. Otherwise, there are personal risks.

Major Mortgage Risks

To date, all the risks arise not from fraudulent actions of banks, but as a result of changes in the life situation of the borrower. Practice shows that debtors part with the houses mainly after losing their job or business, illness (their own or their relatives), a decrease in purchasing power due to rising inflation, and even after the birth of a child.

There are other risks as well. For example, the loss of collateral, but it is easily mitigated by property insurance.

And finally, in the near-mortgage sector intermediary business has long emerged and is flourishing. Various kinds of realtors, lawyers, specialists and appraisers actively offer their help in processing loans and selecting homes. Many of them run an honest business and really help their clients. But there are some who use the legal illiteracy of borrowers for illicit enrichment and crimes. It is necessary to know and remember about it, in order not to become the next victim of fraudsters.

Can the Borrower Improve the Terms of the Mortgage?

Of course, if he increases his official income or provides additional collateral. But some enterprising citizens knowingly provide false information about their income and falsify other data needed to obtain credit. This is outright fraud.

Despite the fact that the mortgage is still an expensive pleasure, and not everyone can afford it, we do not recommend resorting to fraudulent practices and looking for special and superb lending terms.

LBC Mortgage specialists are guided by the procedures prescribed in the legislation and our joint actions with customers allow us to legally get the best conditions on the mortgage as a result of which the client moved into a new home and improve their standard of living. Call us today for a prompt and free consultation!


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