Mortgage Fraud-How Seniors Can Avoid It
Fraud is not something new, and it certainly isn’t going away.
We’re not about to wake up one day and find that fraudsters have seen the error in their criminal ways, turned over a new leaf, and decided to get themselves honest and straight. Even though CoreLogic’s 2019 Mortgage Fraud Report reveals that after steadily increasing since late 2016, fraud risk slowed and stabilized through the first quarter of 2019, American seniors are still at risk.
Scammers are targeting them ruthlessly leaving many seniors in a state of despair.
Why are our senior citizens in the sights of ill-intentioned people that want to take advantage of them?
The Federal Bureau of Investigation says that older folks are easier targets and are more likely to have readily available funds due to life savings or nest eggs they've diligently set aside. This makes them a more attractive target for criminals.
The problem seems to be exacerbated by the fact that many folks do not report being scammed, as they are worried that their family will decide they're no longer able to handle their own financial affairs. Even worse, some do not realize that they were scammed at all.
There is a special breed of scam that combines identity theft and mortgage fraud.
Con artists will pick a home to purchase, and do it under the name of an unsuspecting citizen, using their personal information, credit scores, etc. Once the home is bought, the papers and deeds are transferred to the thief’s name, and they now own the property.
FBI officials say house stealing is not widespread, but it's a crime they are closely monitoring. If you receive any payment books or information from a mortgage company that is not yours — whether your name is on the envelope or not — do not throw it away. Instead, open the envelope, figure out what the documents state, and contact the company, or if need be, contact the FBI in your area or your local police department.
It is also wise to periodically check all the information about your home with the recorder of deeds office in your county. If you find any paperwork you don't recognize or any signatures that are not yours, immediately contact your mortgage company and county officials.
Mortgage fraud specifically, can come in many different forms and can happen at different stages of the home buying process. The unfortunate side effect of a technology-adopting industry is that tech can make it easier for fraudsters to replicate official documentation. And the solution seems to be two-fold, not only relying on those being scammed or having their identities stolen to be more aware of their own security, but also relying on lenders to be more diligent. Having strong quality control and fraud detection processes can help lower the risk of mortgage fraud and protect both lenders and borrowers.
Trust, but verify. Things to look out for so you can be sure that you are not being defrauded: [3]
If you receive a call from a number you do not know and have someone on the line who is pestering you to do any of the following:
- If they want you to take some kind of immediate action, alarm bells should ring. They will say you have to do something right now, or there will be consequences. They may say they are from a bank or credit institution or even a government agency. Make sure they are who they say they are.
- Never, ever provide your credit card number, bank account information, or other personal information to a caller.
- Do not send any money to any person who is calling especially if they tell you to wire money or pay with a prepaid debit card.
A good point to remember is that scammers are getting more and more sneaky with online transactions as they can leave the public open. Some international banks do not have a name on an account but rather just numbers and this means you have no way of knowing if emails have been intercepted and a new account number sent to you to deposit into. Banks may refuse to compensate you for the error.
It does not matter whether a senior is rolling in cash or struggling to make ends meet, making sure our seniors are wiser than the fraudsters is the only way to be certain they can stay one step ahead of these criminals.
IMPORTANT DISCLOSURES
Material contained in this article is provided for information purposes only and is not intended to be used in connection with the evaluation of any investments offered by David Lerner Associates, Inc. This material does not constitute an offer or recommendation to buy or sell securities and should not be considered in connection with the purchase or sale of securities.
To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law.
Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.
These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable– we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.
David Lerner Associates does not provide tax or legal advice. The information presented here is not specific to any individual's personal circumstances. Member FINRA & SIPC