Montgomery County, PA

 

Mortgage Fraud is investigated by the U.S. Department of Justice, Federal Bureau of Investigation (FBI) and is punishable by up to 30 years in prison, a $1,000,000 fine, or both.  There are many mortgage scams being perpetrated and many involve creating and recording a fraudulent deed.  Homeowners can avoid scams by learning about them and by protecting any personal information (i.e., social security number, bank account number, credit card information).  Personal information could be used to steal your identity.  Your identity could then be used in creating a fraudulent deed and obtaining a fraudulent mortgage.

According to the Federal Bureau of Investigation website, Mortgage Fraud is one of the fastest growing white collar crimes in the United States. Mortgage Fraud is defined by the FBI as a material misstatement, misrepresentation, or omission relied upon by an underwriter or lender to fund, purchase, or insure a loan.
 
There are two types of Mortgage Fraud: fraud for property and fraud for profit. Fraud for Property, also known as Fraud for Housing, usually involves the borrower as the perpetrator on a single loan. The borrower makes a few misrepresentations, usually regarding income, personal debt, and property value or there are down payment problems. The borrower wants the property and intends to repay the loan. Sometimes industry professionals are involved in coaching the borrower so that they qualify. Fraud for Property/Housing accounts for 20 percent of all fraud.
 
Fraud for Profit involves industry professionals. There are generally multiple loan transactions with several financial institutions involved. These frauds include numerous gross misrepresentations including: income is overstated, assets are overstated, collateral is overstated, the length of employment is overstated or fictitious employment is reported, and employment is backstopped by co-conspirators. The borrower's debts are not fully disclosed, nor is the borrower's credit history, which is often altered. Often, the borrower assumes the identity of another person (straw buyer). The borrower states he intends to use the property for occupancy when he/she intends to use the property for rental income, or is purchasing the property for another party (nominee). Appraisals almost always list the property as owner-occupied. Down payments do not exist or are borrowed and disguised with a fraudulent gift letter. The property value is inflated (faulty appraisal) to increase the sales value to make up for no down payment and to generate cash proceeds in fraud for profit.

House stealing involves a combination of identity theft and mortgage fraud. The crooks pick a house to steal, possibly a vacant vacation home or a rental property.  Next, they assume the homeowner's identity using any information they can find on the homeowner (property records are public information).  The crooks then create fake IDs, forge signatures and notarizations, and file a fraudulent deed transferring the property from the legitimate homeowner to themselves.  They then record the deed and sell the property or re-mortgage it and pocket the proceeds.  The crooks are long gone before the homeowner is aware of what has transpired.  [NOTE:  Since the document they created and recorded is fraudulent, the crooks do not actually own the property.]
 
How can you prevent your house from getting stolen?  "Stay vigilant", advises the FBI. A few suggestions from the Federal Bureau of Investigation:
If you receive a payment book or information from a mortgage company that is not yours, whether your name is on the envelope or not, do not just throw it away. Open it, figure out what it says, and follow up with the company that sent the information.
From time to time, it is a good idea to check all information pertaining to your house through your county's recorder of deeds office. If you see any paperwork you don’t recognize or any signature that is not yours, research it, then contact your local authorities. 

 

With the rise of home foreclosures, thieves are preying on homeowners who are in default or already in foreclosure.  The crooks convince the homeowner that they can save the home if the owner agrees to a deed transfer and pays some  fees up-front.  The crooks promise to assume or payoff the homeowner's mortgage. The crooks then pocket the fees and often transfer the home into their names. The property is often re-mortgaged or sold outright, with the crooks pocketing the loan or sale proceeds.  The homeowner is still responsible for the original mortgage loan on the property.
 
Be cautious of any offer of "help" that arrives unsolicited and/or seems too good to be true.  If someone is offering to help you, but it involves the ownership of your home changing hands, some sort of up-front fee, or if there is a great deal of pressure to act right away, then be very wary of the "help" being offered.  You can contact the U.S. Department of Housing and Urban Development and talk to a Homeownership Counselor if you have questions regarding any offer of mortgage assistance 1-800-569-4287.

 

Steps the Montgomery County Recorder of Deeds (“ROD”) office is taking to prevent mortgage / land fraud. 

Get referrals for real estate and mortgage professionals when you want to buy or sell a home. And once you do, check out their licenses with state, county, or city regulatory agencies. Most of these people are exceedingly honest and above-board—it’s just a small percentage who have given the overall profession a black eye. 
Do your own research into what other homes in the neighborhood have sold for. Also, look into recent tax assessments of neighborhood homes.
Beware of “no money down” loans. These are a gimmick used to entice people to buy a home they really can’t afford.
Don’t let anyone (i.e., a realtor, mortgage broker) talk you into making a false statement on your loan application, like overstating your income or lying about where your down payment is coming from.
Never sign a blank document or a document containing blank lines. Be sure to read and review all loan documents signed at closing. If you don’t understand what you’re signing, get an attorney who can review the documents for you.

 

Please contact your local police if you think you have been victimized.

 

In Montgomery County, please CLICK HERE to contact the District Attorney's Office.