Mortgage fraud and real estate fraud are on the rise; and the frauds associated with them may take many different forms. As unsavoury as it is to think that these types of fraud happen around us, it is really of little wonder because fraudsters are opportunists and as such, they go for the biggest cons they can accomplish. Examples of the biggest heists in fraud are real estate fraud and mortgage fraud.
“It is important to remember that the fraudsters behind mortgage fraud and real estate fraud are con artists who know how to use modern technology to their pull off their fraudulent schemes”, says Mike Porter of Haywood Hunt & Associates Inc. They are able to do this because they know how the real estate process works and are able to spot loopholes that they can use against their victims.
Real Estate Title Fraud
Real estate title fraud is often made to look like a legitimate real estate deal by the fraudsters claiming that they now own the target property because it was sold or gifted to them by the owner. The usual target here are seniors because it is more believable for a senior homeowner to sell or give their home away, aside from the fact that they usually have the largest assets which makes them attractive targets for fraudsters.
The thief obtains the land title of the victim’s home using a fake transfer document. The details in the document are usually compiled from information that were carelessly shared online (like posting photos of official documents on social media) or from a compiled database full of identity-theft data from target victims.
The title is then used to get a mortgage that the fraudster will never pay. The hapless homeowner is usually informed only when the home is near foreclosure. Imagine losing your home without knowing anything about an unpaid mortgage!
The average real estate fraud costs around $300,000. Nearly none of the fraudsters involved in schemes like this are ever caught and the homeowners are the ones who are left to cope with the aftermath.
How to Prevent Mortgage Fraud and Real Estate Fraud
People who have access to your personal information may use what they know about you to target you for fraud. The first step towards protecting yourself from being a target for fraud is to restrict what personal information you share publicly and limit who can access your information in the real world.
The above means doing all that you can to prevent identity theft and not being too trusting of neighbours, friends, caretakers, or even distant relatives. Your mail, bank statements, deeds and titles, insurance information, and all financial details must be kept where only you or a person you trust can access. This also means not giving away sensitive information over the phone (some fraudsters will pretend to be from the bank), not writing down your credit card details where unauthorized people may see them, and destroying mail before throwing it in the trash; basically following all the sensible steps to avoid fraud.