If you’ve made the life-altering decision to make a home purchase – there is a lot of money at stake! Assuming you’re like most homeowners and don’t feel like being schemed out of hundreds or thousands of dollars, you need to know how to prevent fraud.
Thanks to a mountain of federal and state legislation passed over the past several years, mortgage fraud is much more difficult than it once was. Most states now require all loan officers to be licensed by the state and many also require licensing and monitoring for title agencies, real estate brokers, and more. Many of these laws were issued after the predatory practices of the 2008 subprime mortgage crisis.
While there are now many laws to help better protect homeowners, fraud still happens but you can reduce your chances by vetting your lender, real estate agent, and anyone else involved in the buying or sell of your property.
Any mortgage agent or entity associated with a home sale should be licensed by the state, backed by their respective institutions like the Mortgage Bankers Association, or the National Association of Mortgage Brokers, and should be accredited by your local Better Business Bureau. The more sources that tell you a lending entity is legitimate – the better.