UNDERSTANDING AND AVOIDING MORTGAGE FRAUD

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UNDERSTANDING AND AVOIDING MORTGAGE FRAUD
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• You may not realize it, but when it comes to
  crimes of a financial nature, mortgages give
  fraudsters many opportunities to steal and
  swindle innocent people out of their money. Here
  are some important facts about mortgage fraud and
  ways in which you can avoid becoming a victim
• What is mortgage fraud?
• In its most basic terms, mortgage fraud just as
  with most types of fraud occurs when one party
  deceives another by misrepresenting information,
  facts and figures. Mortgage fraud can be
  committed by individuals intending to make a
  property their primary residence, or by groups of
  investors defrauding rental properties or
  committing appraisal fraud when they flip homes.

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• Mortgage fraud for profit and for housing
• Its often industry insiders who commit mortgage
  fraud for profit, using their specialized
  knowledge or authority, such as bank officers,
  attorneys and appraisers. This type of fraud
  isnt committed with the aim of securing housing,
  but to abuse the mortgage lending process to
  swindle equity from lenders and homeowners.
• Fraud for housing on the other hand, usually
  takes the form of illegal actions by a borrower
  to enable them to acquire or maintain ownership
  of a property. Income and asset information may
  be misrepresented on a loan application to try
  and entice an appraiser to alter the value of a
  property.

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• Other ways in which mortgage fraud may take
  place
• Property flipping While usually not illegal when
  a property is simply bought, fixed up and sold on
  at a profit, if the property is purchased at
  below the market price, and sold at a profit with
  the help of a corrupt appraiser, then mortgage
  fraud may easily have taken place.
• Occupancy fraud
• When a borrower claims that a property will be
  owner-occupied to help them achieve a favorable
  outcome with the bank, but the property is
  unoccupied, this is known as occupancy fraud.

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• Air loans
• Obtained on a property that doesnt exist or for
  a borrower that doesnt exist, air loans are the
  work of a group of professionals coming together
  to create fake borrowers and fake chains of title
  to get a title and property insurance binder.
• Appraisal fraud
• This often occurs when a real estate agent,
  builder, appraiser and loan officer unite to
  maximise the purchase price of a property and
  loan amount, to help increase their commissions.

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• What can be done to help combat mortgage fraud?
• At state, local and federal levels, legislation
  exists to protect against mortgage fraud, and
  many states now require real estate, title and
  insurance agencies to be licensed and monitored
  by government agencies. Periodic audits are also
  required of mortgage lending companies to check
  that their activities and transactions comply
  with the law.
• The Mortgage Bankers Association (MBA) and
  National Association of Mortgage Brokers (NAMB)
  also have codes of conduct and best practices
  that are peer-monitored.

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• Working with a licensed and knowledgeable
  mortgage broker can help you to remain safe from
  the risks of mortgage fraud, and provided they
  are registered and have a list of satisfied
  customers, there is no reason why you shouldnt
  safely and legally, get the best mortgage deal
  for you.

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• Red Key Mortgage is located in Calgary, Alberta.
  We are a boutique brokerage with high volume
  serving hundreds of clients locally and
  nationwide every year. We have a number of
  associates dealing in mortgages as licensed by
  the Real Estate Council of Alberta. As a best
  mortgage broker in Calgary, Red Key Mortgage,
  will provide all of your available options from
  the entire mortgage market and allow you to make
  an educated decision where you'd like your
  mortgage to go. Red Key Mortgage works with big
  banks in Canada, as well as over a dozen other
  AAA lenders. Best of all, our services are paid
  for by the lenders at no additional cost to our
  clients. If you are looking for a Calgary
  mortgage broker, contact us today! We can't wait
  to get started.