In recognition of National Protect Your Identity Week, October 19-25, Florida Attorney General Bill McCollum today issued a consumer advisory warning Floridians about mortgage fraud-related identity theft.
The crime can occur when "straw borrowers" are recruited to perpetuate a mortgage scam on a lending institution.
The person who allows their good credit to be used as a straw borrower typically ends up with ruined credit, significant debt and potential criminal charges. The crime can also be perpetuated through criminal identity theft, which occurs when thieves steal a person's identity or personal information, unbeknownst to the victim, and use that information to secure mortgages or other home loans.
"Identity theft can be one of the more personally damaging results of mortgage fraud," said Attorney General McCollum. "This financial destruction can ruin a person's name, credit, and other personal financial aspects, and may even result in litigation against a straw buyer engaged in a mortgage fraud scheme."
Just last month, Attorney General McCollum sued 10 companies and 15 individuals for a massive $37 million mortgage fraud scheme utilizing straw borrowers in Central Florida. In that case, the ringleaders allegedly defrauded banks by recruiting straw buyers with good credit to create false mortgage loan applications.
The scammers also allegedly created fraudulent supporting documentation for the applications including bogus employment information for the straw buyers. In many cases, the defendants failed to make the required mortgage payments on behalf of straw buyers and allowed at least 50 properties to fall into foreclosure.
Six alleged straw borrowers are named as defendants in the Attorney General's lawsuit.
Tips to avoid mortgage fraud-related identity theft and fraud from the U.S. Department of Housing and Urban Development include:
- Be wary of any attempt to persuade you to make a false statement on
your loan application, such as overstating your income or the source of
your down payment, and failing to disclose the nature and amount of your
debts or how long you have been employed. Lying on a mortgage application
is fraud and may result in criminal penalties.
- Be wary of any attempt to persuade you to borrow more money than you
know you can afford to repay.
- Never sign a blank document or a document containing blanks. If
information is inserted by someone else after you have signed, you may
still be bound to the terms of the contract.
- Read everything carefully and ask questions. Do not sign anything
that you don't understand.
- Be honest about your intention to occupy the house. Stating that you
plan to live there when in fact you do not violates federal law and is a
crime.
Floridians who believe they may be victims of identity theft or fraud may contact the Attorney General's fraud hotline at 1-866-9-NO-SCAM (1-866-966-7226) or file a complaint online at http://myfloridalegal.com.
It's important to note, though this may be a warning to Florida residents, this type of scam has been occurring nationwide. If you do not live in Florida but believe you may be a victim of this scam, file a complaint with your state Attorney General's office and report the scammers to your local police department.
Remember the best way to prevent an identity theft is to prepare for one!
Are you prepared?
For more tips on safeguarding your identity search this blog & archives, or read a couple of my earlier posts below:
Do you know what steps to take...
Videos, tips and additional info see:What should I do?
The crime can occur when "straw borrowers" are recruited to perpetuate a mortgage scam on a lending institution.
The person who allows their good credit to be used as a straw borrower typically ends up with ruined credit, significant debt and potential criminal charges. The crime can also be perpetuated through criminal identity theft, which occurs when thieves steal a person's identity or personal information, unbeknownst to the victim, and use that information to secure mortgages or other home loans.
"Identity theft can be one of the more personally damaging results of mortgage fraud," said Attorney General McCollum. "This financial destruction can ruin a person's name, credit, and other personal financial aspects, and may even result in litigation against a straw buyer engaged in a mortgage fraud scheme."
Just last month, Attorney General McCollum sued 10 companies and 15 individuals for a massive $37 million mortgage fraud scheme utilizing straw borrowers in Central Florida. In that case, the ringleaders allegedly defrauded banks by recruiting straw buyers with good credit to create false mortgage loan applications.
The scammers also allegedly created fraudulent supporting documentation for the applications including bogus employment information for the straw buyers. In many cases, the defendants failed to make the required mortgage payments on behalf of straw buyers and allowed at least 50 properties to fall into foreclosure.
Six alleged straw borrowers are named as defendants in the Attorney General's lawsuit.
Tips to avoid mortgage fraud-related identity theft and fraud from the U.S. Department of Housing and Urban Development include:
- Be wary of any attempt to persuade you to make a false statement on
your loan application, such as overstating your income or the source of
your down payment, and failing to disclose the nature and amount of your
debts or how long you have been employed. Lying on a mortgage application
is fraud and may result in criminal penalties.
- Be wary of any attempt to persuade you to borrow more money than you
know you can afford to repay.
- Never sign a blank document or a document containing blanks. If
information is inserted by someone else after you have signed, you may
still be bound to the terms of the contract.
- Read everything carefully and ask questions. Do not sign anything
that you don't understand.
- Be honest about your intention to occupy the house. Stating that you
plan to live there when in fact you do not violates federal law and is a
crime.
Floridians who believe they may be victims of identity theft or fraud may contact the Attorney General's fraud hotline at 1-866-9-NO-SCAM (1-866-966-7226) or file a complaint online at http://myfloridalegal.com.
It's important to note, though this may be a warning to Florida residents, this type of scam has been occurring nationwide. If you do not live in Florida but believe you may be a victim of this scam, file a complaint with your state Attorney General's office and report the scammers to your local police department.
Remember the best way to prevent an identity theft is to prepare for one!
Are you prepared?
For more tips on safeguarding your identity search this blog & archives, or read a couple of my earlier posts below:
Do you know what steps to take...
Videos, tips and additional info see:What should I do?
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