Mortgage Fraud Schemes

Making an apartment on credit is considered a safe option, because the bank will check all property documents for legal purity. Errors in the transaction are excluded, because each item of the contract is checked by the employees of the lender. Title insurance protects against the risk of loss of property rights. It would seem that all measures are observed, housing and the parties to the agreement are carefully checked. However, the rights of the seller, even in a mortgage transaction, are vulnerable, and for the most part through his own fault.

The scheme of deception of the seller implies his consent to the introduction of false information in the contract in the hope of a quick sale.


How do fraudsters act at a mortgage?

How do fraudsters act at a mortgage?

Each mortgage transaction involves a down payment as a demonstration of the buyer’s serious intentions and readiness for partial financing of the purchase at the expense of personal savings. It often happens that a person has no funds, and banks with a zero down payment have not worked for a long time. At this stage, there is a temptation to change the amount in the contract for a larger value in order to force the bank to finance the purchase of housing in full.

The value of the credit line is finally determined when the person informs that he is ready to pay some of the value of the property from personal savings, and the bank deducts this amount from the price of housing. The amount of the housing loan will be equal to the value of the object less the first installment. If all participants are honest, no further problems arise. But if the buyer reports that he does not have the necessary amount of savings and offers to indicate a higher price in the contract, the seller seriously risks agreeing to deception.

In order for the sale to take place, the seller signs a receipt for the first amount, and waits to receive the balance from the lender. However, this may not happen, and the deal fails. The parties remain each with his, but in the hands of the buyer is a receipt in the receipt of the first installment by the owner of the property. From this point on, the seller risks being a debtor to the buyer, who, when the agreement is broken, requires the return of the amount allegedly transferred on receipt.

There is the usual fraud associated with the frivolity and credulity of the seller who wanted to quickly and profitably sell real estate. Further appeal to the court by the buyer with the requirement to return the money on receipt will lead to great trouble. Instead of money for an apartment sold, a person will receive a substantial debt and an obligation to repay it.

Attempts to prove the wrongness of buyers can only aggravate the situation, because when the borrower informed the bank about the receipt of the first installment, he also participated in the fraud.


Not to fall into the hands of fraudsters

Not to fall into the hands of fraudsters

you should not agree to changes in the contract. If the buyer does not have the funds even for the first installment and is ready to deceive the creditor, it hardly makes sense to hope for his decency and honesty. There are plenty of other options for obtaining money for the first installment, and if you want a serious buyer will find a way out without involving others in fraud.

A mortgage transaction is less risky because the bank is interested in observing legality and legal purity. The main thing is that the seller himself understands the importance of every nuance of real estate transactions and does not agree to participate in suspicious fraudulent schemes.

Leave a Reply

Your email address will not be published. Required fields are marked *