Three Tips for Mortgage Newbies
Now that it's spring and home buying is in the air, Freddie Mac's fraud investigators are getting the word out to new homebuyers about steering clear of mortgage and real estate frauds.
- Make sure all the blanks on your mortgage application are filled in correctly before you sign it. Leaving blanks on a signed document makes it easy for a fraudster to change key information about yourself (think income and assets) or the amount you are borrowing, the interest rate you agree to pay, or even whether the interest rate is fixed for the life of the loan or will adjust. Bottom line: never sign a mortgage application until you are certain the blanks are filled in correctly.
- Only provide your mortgage application and qualifying documents, like income statements or tax returns, to your loan officer. Give it to them in a secure location, like an office or your home. This single tip will go a long way to protecting you from identify theft.
- Speaking of identity, don't sell yours! Many real estate scams involve straw buyers – i.e., people paid a small fee for the use of their identity. Fraudsters take out a mortgage in the straw buyer's name so they don't have to reveal their own. The mortgage invariably goes into foreclosure and the straw buyer ends up with debts and a ruined credit rating.