Fraud Protection

Watch out for e-Threats that could affect your Identity

By | Consumer Rights, Credit Repair, Fraud Protection, Your Credit

An e-Threat is a type of identity theft that is handled electronically. This type of threat is directed specifically to obtaining your personal information for illegal purposes. There are several types that could affect you. Here is a list of types and some explanations of how they work. The first three don’t even require a computer for you to become a victim of identity theft.

1. Vishing (Voice Phishing) – You may come home one day and see a message on your answering machine. This message indicates that you should call your bank or credit card company. Even the caller ID shows the bank or credit card company’s name. So you call the number and are asked to punch in your account number, your pin or other personal information. Then the message might indicate that the problem is resolved and thank you for your prompt attention to the matter. But when you get your statement, you will find that there are lots of charges on your account that you never made. If you get a message like that, compare the number to the number on the back of your card. If they are not the same, call the number on the back of your card and report what happened to you. The Credit Card Company or Bank might be aware of the Vishing problem already, but you may be alerting them to a new threat. If there is truly a problem, then calling the number on the back of your card will get you legitimately transferred to the correct department and then you can work to solve any issues you have.

2. Bank-Card Skimming – There are two types of theft under this category. You need to watch pulling money out of an ATM Machine. A thief may install a device over the ATM machine that will allow your card to pass through their device and into the ATM Machine. They will also have some type of camera pointed so that they can record your entry of your pin into the ATM. This will give them all of the information they need to completely empty your account plus get as much as possible leaving you with an overdraft and all of those fees. The second type of skimming is done at a store or restaurant that has a dishonest employee. The store or employee might have a portable card reader. They will swipe your card so that they have all of the information they need for most online purchases and might possibly steal your pin information. They can take that information and transfer that information to any plastic card with a magnetic stripe. I have even seen a hotel key card used as a credit card. They transfer the information to the card, and then go make a purchase. Most stores have the card device for the consumer to swipe their own card. So no one has to see the card (thus allowing the use of the hotel key card). Make sure that if you use the ATM, watch and look for any changes to the machine. Additionally, watch your card when you use it at a store. Try to keep an eye on transaction to keep the dishonest worker from illegally swiping your card into a portable device.

3. Simple theft of your identity – If your wallet or purse gets stolen, report this immediately. Keep a list of your credit cards and phone number to those cards someplace where you can access that quickly. Do not throw any personal information away in your trash and watch your mail for any theft. These are the easiest ways to have your identity stolen.

4. Spyware – The first type of computer based theft. Spyware is software designed to record your keystrokes. By obtaining that information, they might be able to access your credit card information, bank account information and the appropriate personal information including pin information. This will allow the thief to use information online and make purchases using your information. The spyware can also be used to access information on your hard drive. Getting a good security software package can protect you from Spyware.

5. Spoofing – This type of theft is also known as Pharming. A computer hacker may redirect a legitimate web site’s traffic to another site known as an imposter site. From there you will be asked to enter your personal information. Once you have entered your personal information into the imposter site, you will become a victim of identity theft.

6. Smishing – This type of theft is fairly new and could become a big as more consumers are using smart phones. This is done by sending a text message to your cell phone and then will instruct you to visit a website that will request your personal information. Of course, this is done with lots of glam and glitter so that you are not suspecting anything illegal. You may be thinking that you are buying something legitimate but in actuality you are getting your identity stolen.

7. Phishing – This is one of the most common types of identity theft online. You will receive an email that will look completely legitimate (mostly from ebay or paypal). You will click on a link in the email and it will take you to an imposter website and ask you for your personal information. Since everything looks legitimate you will punch in your information and then it will be used for illegal purposes.

These types of identity theft are becoming more common as more people are using online shopping. Protect yourself by using common sense and paying attention to the information you are providing. If you become of victim of identity theft then you will have some credit problems and possibly bad credit. Some online shoppers have been doing business online for years and have never been a victim of identity theft. This does not mean you can let your guard down, but you must be diligent in what information you are providing to anyone.

Obtain your credit report for FREE

By | Consumer Rights, Fraud Protection, Your Credit

Every year consumers have the right to review their credit report for free. The Fair Credit Reporting Act (FCRA) requires that the three major credit bureaus (Equifax, TransUnion and Experian) provide you with your credit report. It is recommended that you take the time at least once a year to review your credit report. You can obtain information regarding the FCRA or the Federal Trade Commission (FTC) at

The website can provide you with information regarding your rights and your right to obtain your annual credit report for free. A credit report provides information on where you live and your credit history. It also provides information on any legal issues you may have included being sued, arrested, or filed for bankruptcy.

This information is used to evaluate applications for credit, insurance, employment or renting a home. It is extremely important that you take the time to review your credit report and dispute any information that is not accurate on your report. This is often called disputing and can be done by the individual but is often very tedious and time consuming. A legitimate credit repair company such as Ovation Credit Services can obtain information from you about which items on your credit report is inaccurate and dispute that information for you until the information is correct. Credit repair is a legal way for you to correct information on your credit report that is inaccurate.

You can obtain your FREE credit report by one of three methods:

1. You can go online to (be sure that you spell this accurately since there are many imposter sites).

2. You can phone 1-877-322-8228 and provide them with the necessary information.

3. You can obtain an Annual Credit Report Request Form (generally online at and mail that to: Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281

No matter which way that you choose to obtain your credit report, you will need to provide some information. That information is your name, Social Security Number and date of birth. Sometimes you will need to also provide additional information to verify your identity. That information may include information that only you would know such as your monthly mortgage payment amount.

There are many imposter sites that will offer you a free credit report but only if you purchase one of their products. The authorized site may have some offers or additional products for sale but you are not required to purchase them to obtain your free credit report. That free credit report will have information from the three major credit bureaus.

Avoiding Credit Card Problems

By | Consumer Rights, Fraud Protection, Your Credit

Here are a few tips to help you avoid some credit card problems and some information to help you understand how retailers may get preauthorization on your credit cards.

When you go to certain retailers such as hotels, car rental agencies and even some bar or restaurant locations, these companies may get a pre-authorization on your credit card and reserve a certain amount on those cards. The credit card company will then put a hold on your credit card until they have been processed for the complete total. This could possibly limit the use of a card because you have reached your credit limit even though you have not used the amount.

Some Fuel Centers are notorious for this as they see you pulling up to get a tank of gasoline. Then you swipe your card. Even though you may have only pumped in $20.00 in fuel, they might have got a hold on your card for $75.00. Some of these retailers don’t process their credit card payments every night so if they don’t process for a couple of days, your credit card thinks that $75.00 has been used and not the $20.00 that you actually pumped into your car. Most retailers don’t even know that they are doing that because it is the company that the retailer is using for processing their credit payments. Just be aware that even though you will get credited for the $75.00 and only charged the $20 that you put in, it will just hold up your card usage.

When you are traveling or you are out on business, you want to remember that this does occur. Hotels and Car Rental companies generally get the pre-authorization and put a hold on what they figure might be your expected expenditure (plus some). Hotels also might get some additional if they have things like room service or a restaurant and bar on the property. They might put a hold on an amount double to what your true expenditure might be.

Because of this, you will want to try and find out what “pre-authorized” amount is being put on your card. This might help you from running into an embarrassing situation like the following.

Say you flew into a town on business. You rented a car and then checked yourself into a hotel as you are planning on being in town for a few days. You have invited a client out to dinner to discuss business. You don’t realize that your card is technically over your limit due to the hold that has been put on your credit card due to the car and hotel. It now comes time to pay for dinner and it gets declined. How embarrassing that could be and could cost you some business.

It is important that you keep that in mind when using your credit cards. Many people have several cards for different reasons. One card might be used for travel (airline, car rental, etc…) and another card might be used for hotel and food expenses. Finally you might have one card that you use strictly for business (such as taking a client to dinner). This often helps you keep from running to problems with certain cards being over their limit.

Sometimes those card amounts that are on hold get removed once the true balance has been processed, but again, that may not happen right away. Remember to keep tabs on any and all charges that are made to your credit cards. Reviewing your statement each month especially after traveling is extremely important as you might have been a victim of identity theft while you were traveling and may not know until you get the statement.

If you have any questions about the amounts being put on hold, ask the retailer. If they can’t or don’t answer the question, contact your credit card company. They can go over your expenditures and tell you what they show on your account. Make sure that you compare your receipt to the statement at the end of the month. Never reveal a bunch of credit cards when opening your wallet or purse as this becomes a strong temptation to a thief. Watch who you give your credit card information to and monitor the purchase or transaction. Altering the numbers is not as easy as it used to be, but adding a “tip” could clearly be altered if you don’t see the final charge receipt.

Contact the credit card company with any questions in regards to the balances or hold figures currently on your credit card.

What are your rights regarding Debt Collectors?

By | Consumer Rights, Debt, Fraud Protection

The Fair Debt Collection Practices Act (FDCPA) was enacted in 1977 to protect consumers against many debt collection practices that were meant to annoy, harass or oppress. Congress found that there was a huge amount of evidence supporting the fact that many debt collectors were using tactics that were unfair in their attempts to get debts collected. These practices were contributing to a large number of personal bankruptcies, marital instability, and a huge amount of job loss and too many invasions of individual privacy.

The act is made up of several different parts. You can download the entire document in PDF format from the website. I recommend that you obtain and read this document to help you understand your rights and the rights that debt collectors have to follow.

Debt collection companies can speak with individuals or others concerning locating the consumer. This includes speaking with or locating their employer. But they cannot speak about the debt in question during their attempt to locate the consumer in question.

Debt collectors are not allowed to communicate with the consumer at any unusual time or place. If you give the debt collector permission to contact outside of the limitations, they can and do call outside of the time guidelines. Currently the guidelines are after 8am and before 9pm in the time zone that the consumer resides.

The Debt collector is not allowed to contact the consumer at their place of employment once the collector knows or has reason to know that the employer prohibits that type of communication at work.

The debt collector is not allowed without prior consent to contact any third parties unless given permission by a court or by the consumer (or the consumer’s representative).

The consumer has the right to notify the debt collection agency that they want them to cease communications. This request must be in writing and will stop future communication. The Debt Collection Agency shall not communicate further with the consumer except to notify the consumer that they are ceasing communication or to notify the consumer that they might invoke other specified remedies such as an attempt to obtain a judgment against the consumer.

A debt collector may not engage in any conduct that is meant to harass, oppress or abuse any person in connection with the collection of the debt.  They are not allowed to use or threat to use violence or other criminal means that could harm the actual person, reputation or property of any person. They can not use any obscene or profane language that could abuse the consumer either verbal or written. They are not allowed to publish any list of consumers except to a consumer reporting agency (Credit Bureau). They are not allowed to harass, annoy, or abuse any person by causing a telephone to ring and ring or to continually try to engage a conversation with the consumer.

Debt collectors are not allowed to give false representation of themselves or any false representation of the debt and amount of the debt. The debt collector may not imply that they are an attorney or that their communication is from an attorney.

So if you have a debt collector call, don’t be afraid. Answer them truthfully and honestly as this will only help you getting the problem resolved. Don’t be intimidated because you have rights and they are just doing a job. Review the claim and dispute anything that you don’t agree with. The debt collector is required by law to validate any claims and to try and attempt collection of that debt.

What do thieves do with your stolen identity

By | Fraud Protection, Your Credit

Once a thief has your information what can they do with it? There are many ways that your identity could be used and only some of them will cause you immediate financial loss. It is important for you to watch and be aware of things that could cause you problems both short term and long term.

The first way your identity could be stolen and used is Credit Card Fraud. A thief may open new credit card accounts in your name. When they use the cards and don’t pay the bills, the delinquent accounts will appear on your credit report. It is important to monitor your credit report at least once a year so that you can dispute any accounts that are not yours. Also monitor the addresses that appear on your credit report. One of them might be the thief’s address. The identity thief might change the billing address of your credit card so that you no longer receive bills. Then they can run up charges on your account so you won’t see any problems for a while. That is why it is important to monitor and keep track of your accounts.

Phone or Utilities Fraud is another way to be a victim of identity theft. The thief might open a new phone or wireless account in your name and then run up charges on your existing account. The thief might also use your name to get utility services such as electricity, heating or Cable Television.

Bank or Finance Fraud is a common type of identity theft. Once a thief has your information, they can create counterfeit checks using your name or account number. The thief can also open a new bank account in your name and write many bad checks. They might also clone your ATM or Debit card and withdraw money from your accounts, leaving you penniless. Finally, the thief might use your information to take out a loan. Then they don’t pay that back and leave you with the problems.

Another type of fraud that can be done with your information is getting government documents. They might get a driver’s license or ID card in your name with their picture. With that information, they also might be able to get a copy of your social security number and get government benefits. They may also use that information to file a false tax return using your information.

There are other things that your information could be used for such as getting a job using your social security number. The thief might sell your information to someone who does not have the proper documentation. Someone might use your information to rent a house or get medical services using your name. The information could be used to provide information to the police during an arrest. If they don’t show up for their court date, a warrant for arrest is issued in your name.

These are all things that your stolen identity could be used for, so it is important to monitor your information and keep track of information that you are giving out. Please remember to check your accounts often and be concerned about any irregularities.

How does your identity get stolen?

By | Consumer Rights, Fraud Protection

Identity Theft is becoming a bigger and bigger problem every day. Your identity goes through many different processes each day and those processes can be contributing to identity theft each and every day. When your identity is mishandled or misused it can easily fall into the hands of someone who can take advantage of your good name. What should you be watching for and what can you do to protect your identity? It is important for you to know how identities get stolen and what you can do to protect yourself.

The first method of identity theft is known as “Dumpster Diving”. A thief will go through your trash to find bits and pieces of information that they can use. Sometimes the smallest piece of information can be added to your other information to get the complete identity. It is important that you do not throw anything away into your trash that has your personal information. Bank Account statements, credit card statement, medical information and billing can provide a huge amount of information. This type of information should be stored for its designated amount of time, and then it should be destroyed.  A Cross-cut shredder is a great investment and if you purchase the right one, you can also destroy old credit cards and compact discs that have your personal information.

Another method is known as “Skimming”. An Identity thief can take your credit card and swipe that through a special storage device. That device takes all of the information from your card and stores it. Then the thief can transfer that information to another card with a magnetic stripe so that your information is now on the “new” card. A recent television station showed how easy it was to steal the information and they transferred the information to a hotel key card. Then they went to local stores and purchased items using the hotel key card as the stolen credit card information. Not one store caught them processing the key card and they were able to walk out with lots of merchandise. It is important to keep your eye on your card as it is being processed. Now this is not always possible, especially at restaurants, but you certainly can monitor your accounts to make sure that they are being used as you want. Monitoring your credit card accounts, especially online, can give you immediate access to your information and you will be able to see when something is not being used properly.

The third way for identity theft is “Phishing”. It is pronounced Fishing and it is when the thief pretends to be a financial institution or company and they send spam or pop-up messages hoping to get your personal information. This is done mostly by computer or telephone. Never give your personal information out to someone who is unknown. You can call the company back and give them information rather than giving out your information to someone on the phone. If you purchase items online make sure that you are working on the proper website and under a secure connection. Never give your personal information to a pop-up window.

Another way to become a victim of identity theft is the old fashioned way of “Stealing”. The thief will steal your wallet or your purse, take your mail including bank and credit card statements. They also will steal pre-approved credit offers and check or tax information. They will steal your personnel records or bribe other associates that have access to your personal information. It is important for you to monitor your information and keep track of when things come to your mail. Watch your mail for your statements and other information that could easily be used in identity theft. If you come up missing information, don’t be afraid of calling your bank or credit card company and let them know that you did not get your statement. Then with online access you can monitor your accounts to see if anyone uses your information without your permission.

The last way your identity could be stolen is one that could be the most difficult to find out. If the thief uses a false pretense to gather your personal information from financial institutions, telephone companies and other sources, they could use that information to get better information on you. That new information can give them information that would allow them to get your bank and credit card numbers, information on your credit report and information regarding your savings or investment portfolios.

There are many ways that information can be stolen and you can’t protect yourself from them all. But with your diligence it can help you avoid situations that could cause problems and financial loss. Observation is important because you can see that the thief is observing you and will take advantage of any miscues you make regarding your identity. You can file complaints with your local police department and with the FTC. Simple observation by you will keep most thieves at bay and your identity safe.

What to ask a Credit Counselor or Agency before signing up

By | Consumer Rights, Debt, Fraud Protection

If you are considering using a credit counselor to help you get things back on track and work to get your debts paid, then you should be asking the right questions. Once you have asked the right questions, you will have answers that you can use to help you determine which credit counseling service is right for you.

Remember if you are thinking about using a credit counseling service it is important that you find the right one. One firm may be charging you hundreds of dollars for things that another agency might be doing for a lot less money. It pays to ask questions and listen to the answers before you sign up.

An educated consumer will understand what they are getting into and be prepared for outcome. Credit Counseling Agencies can hurt your credit as much as help you if they don’t do it properly.

Questions to ask:
1.  What do your services cost? Be looking for answers that show complete fees. Some companies give you a price but then charge you fees for other work that is done. They don’t always tell you about those fees.

2. How do you determine what is the amount of my payment? You want to make sure that they explain to you how they figure out what you have to pay and what they will be paying to your creditors.

3. What happens if you sign up and the payment that they figure out for you is more than you can afford? Many people have signed up only to find out that they can’t get their payments under what they can afford.

4. How does the debt payment plan work? There are many questions that go along with this one question. (How do I know that my creditors have been paid? How do I know that the creditors have received their payments? Is my money put into a different account than your operating funds so that my money is used to pay my creditors and not your bills?)

5. How often do I get updates on my accounts? Can I access that information by phone or online?

6. Can you get my creditors to reduce the interest or eliminate it altogether and can you get them to waive their late fees and finance charges?

7. Is this the only option that I have or do you have anything else that I might be able to do regarding my debt?

8. What happens if I am unable to continue with this agreement? What if I become injured or disabled and can’t continue to make my payments?
9. Are there any debts that won’t be able to be included into this agreement? Watch out for agencies that tell you that several of your debts won’t qualify for the program. The program may not be right for you if they can’t help you completely.

10. Who will be helping me plan out the payment of the debts and working with me as we pay things off completely.

11. Who is going to be helping me if there are problems with the creditors or my accounts?

12. What protection do you have regarding all of the personal and private information you will have? I have concerns about Identity Theft.

These are questions that will help you determine if the agency can help you. If the questions make the people at the agency nervous then be aware that an ethical agency will not be afraid to answer those questions because you are looking at all things that could happen. Protect yourself and your information at all costs. Don’t give out any personal information that is not required. Unethical agencies have used the personal information to steal identities and also take your money as they “work” on your file. But in the long run the agency did not make any payments and just put you into a worse situation. Don’t hesitate to walk away before signing up if you are not comfortable.

Subprime Mortgages

By | Fraud Protection, Mortgage

What is a Subprime mortgage? Can you get one in today’s economy? These are all good questions but the answers may surprise you.

A Subprime mortgage is a mortgage designed for borrowers that have lower credit scores. Credit scores ranges from 300 to 900 and most consumers in America have a score that ranges between 600 and 700. Anyone with a score above 720 generally has their pick of credit offers and usually qualifies for the best of loans. But borrowers who are looking for mortgages but have scores that are lower than 620 will be looking for loans listed as Subprime Mortgages.

If you are someone who usually pays your bills late or fall behind on debts from 30-90 days you will fall into this category. This actually falls on most Americans since the average American has a score of 620. So if you have an average score or below, you will need to shop by comparison on your mortgage.

Subprime loans will have higher interest rates than prime loans. Mortgage lenders look at these subprime loans in a process called “Risk-Based Pricing”. This means that they will try and determine how much of a risk you are and charge you accordingly. It makes it impossible to put your finger on a subprime rate since most lenders will weigh many different things when determining your interest rate and fees. The larger your down payment, the types of delinquencies you have in your recent past will help determine that rate. For example if you are showing that you’re paying your mortgage or rent late but making your credit card payments on time, you will be a higher risk for a mortgage loan. But if you have high medical expenses and lenders see that you have been paying your mortgage or rent on time, then you might get a break on your interest rate.

Subprime loans also may have a balloon payment or a prepayment penalty. If you decide to pay your mortgage off early, then you have to pay a penalty or a balloon payment that will be assessed after a certain period of time. If you can’t afford to make the balloon payment then you might have to refinance or sell the home.

Subprime lenders will tell you that you get lower interest rates in exchange for the prepayment penalties or balloon payments but this is very debatable.

As a subprime customer you need to be aware of many lenders that will be looking to take advantage of the situation. Since you will have a more difficult time in getting a mortgage some lenders will use that to make it easier for you to get a loan and will end up taking you to the cleaners. These types of lenders will try to cheat borrowers with outrageous fees or sky-high interest rates. The lenders might even tell you that your credit score is lower than what it truly is. The lender might also pressure you into refinancing your home often and will be collecting closing fees each time. They may roll them into your new mortgage amount but you will still be paying these fees each time.

The unethical mortgage lender will be looking for you to default so that they can foreclose on you and start all over with another victim. The ethical lender will not want to foreclose on you because it really is a money losing process. The ethical lender will make money on the interest that they are charging you and will lose money if they have to foreclose. The bad mortgage lender will make profits by repeating the process of collecting closing fees and then seizing the house.

But you can protect yourself by knowing what your credit score is prior to shopping for a mortgage and use people that you know and trust to help locate some mortgage lenders. Use comparison shopping to compare several different mortgage brokers or lenders. There are as many ethical lenders as there are unethical ones so watch out.

What to watch for in Mortgage Fraud

By | Fraud Protection, Mortgage

In a previous blog, we talked about mortgage fraud but now we want to talk about how to recognize the signs of mortgage fraud. These are some common things that are encountered when dealing with Mortgage Fraud.

1. Inflated appraisals – An inflated appraisal will help in the scam by raising the value of the home to hide additional fees or other costs.

2. Mortgage brokers who insist that the applicant work with a specific lender – although this is not mortgage fraud it could mean that your broker is working to get you a loan and more money in their pocket(s).

3. High commissions or generous bonuses offered to appraisers and brokers – Unusually high commissions or very generous bonuses will tend to lead you to someone who is falsifying information and not necessarily working in your best interest.

4. Wanting individuals to borrow more than they can truly afford – by borrowing more money than you can afford, you will be putting more money at risk for you, not them. By borrowing more money than you can afford, you will be more likely to default or fall behind on the mortgage.

5. Promises of getting high profits in a very short period of time. Any promise of high profits is generally a warning sign due to the unexpected nature of the housing market. Claims that you will get large profits are enticing you to make the deal. This may be and has been the downfall of many home buyers.

6. Any false information for the purpose of obtaining a mortgage. This is pretty self explanatory but remember getting the loan on your terms is best. Remember “Honesty is your best policy”.

7. Failure of any lender to furnish copies of every document that you sign. Some of the papers requiring your signature could be used to commit these scams and also could be used for identity theft.

8. A broker or lender that is asking for your signature on any document that is missing information or is blank. Never sign anything that is missing information or is blank and get copies of everything that you sign.

You can avoid mortgage fraud and other shady practices by keeping certain things in mind. Don’t purchase a loan that is disguised as a refinance. Get referrals for all of your mortgage professionals. Check out the licenses of the mortgage professionals that you are considering using. Find out if the property your interested in has been sold numerous times in a very short period of time. Make sure that you understand the terms of your mortgage and have an attorney review the contract. Check out the neighborhood and tax assessments to verify the true value of the property. Finally stay away from online mortgage websites promising to raise your credit rating for a fee.

When you have found the home you want to purchase find a qualified appraiser (on your own) and check out that appraiser’s accuracy. Have that individual do an appraisal on the home you want to buy and compare that to the numbers that you see in your loan documentation. Using a good online resource for getting mortgage help will help you in the long run. They can provide you with mortgage quotes, rates, history of mortgage rates, payment and affordability calculators and most importantly a list of reputable mortgage lenders.

Mortgage Fraud, What is it?

By | Fraud Protection

In today’s economy, some people are resorting to different means to try and get out of their financial situation. Many shady lenders who have got themselves into trouble are resorting to less than honest means to try and recover from today’s problems. When it comes to getting a mortgage, you should know that an informed applicant is best. By being informed and knowledgeable you will protect yourself from less than honest lenders. It has been estimated that losses resulting from fraudulent mortgage practices are totaling around $3 billion dollars and growing. Although the Federal Government is aggressively working on the problem, it has been on the rise and is found nationwide. No segment of the population is left out but it is most commonly found on First Time Home Buyers, Seniors and those struggling to make their mortgage payments and in a hurry to sell their home.

Mortgage Fraud is a scheme by a lender or other interested parties misrepresent, deceive or omit information to make it possible to get a loan. Although this sounds like a good thing for some home buyers attempting to buy a home, it leaves behind a mess for those involved in this scam. There are generally higher cases of foreclosures, defaults and delinquencies with these scams. There are also increased expenses such as higher attorney fees, broker commissions and foreclosure costs. These things cause inflated real estate prices that are not real and will impact property values with inflated property taxes making it more difficult to sell homes in the areas affected.

Mortgage Fraud basically falls into two categories:

1. Fraud for housing or fraud for property scams. These types of scams are designed to help a borrower get ownership of property that would generally be unaffordable to them. The scam will be to get false information regarding employment, assets or income. Sometimes there are mortgage industry representatives working with the borrower to aid and assist the borrower to get that false information.

2. Fraud for Money scams. This type of fraud is sometimes referred to as “Industry Fraud” since there are generally multiple loans and a group of individuals involved in defrauding a mortgage lender or prospective homeowner in issuing loans on fictitious real estate or inflating property prices. The person perpetrating the scam will generally use a few different methods in using this scam. They will use identity theft, false information on loan documents and appraisals and finally illegal property sales which will include false appraisals and selling of a home at a higher cost to help inflate prices. There are also “Straw Buyers” that will lend their good credit and identity to these schemes in exchange for money and/or property.

Mortgage lenders that often cater to home buyers with bad credit generally are where the fraud occurs but that is not an exclusive area. These people that commit Mortgage Fraud can be found everywhere but generally prey on homeowners or buyers who are in precarious financial situations. They will also use some unsavory lending practices such as charging excessive fees, additional points and higher interest rates.

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