Mortgage fraud is on the rise. According to a recent publication of the National Association of Realtors Magazine, mortgage fraud climbed 12.4 percent year over year in the second quarter of 2018. Of the instances discovered, one out of every 109 mortgage applications has been found to contain false or misleading information. Many factors contribute to the rise, but rising interest rates and home prices continuing to rise while buyer wages have not kept up, causes increased competition to acquire properties.

During the sizzling hot spring market this year, many buyers lost out on properties as multiple offers were the norm in many neighborhoods of Chicago. Clients submitted offers well over asking price time and again during this period only to learn that they were outbid. Buyer-fatigue, as Realtors loosely refer to buyers ending their search without being fruitful due to emotional exhaustion caused by the bidding process, caused a steep drop in the following months in the Chicago market, but the damage was done, buyers felt they had to come back stronger than before, higher down payment in hand and some blemishes to their financial statements swept under the rug…and this is where the trouble lies!

Don’t underestimate the severity of mortgage fraud. With a great Realtor by your side, you can still win a multiple-offer situation the honest way. Here’s what not to do when preparing for your purchase:

DO NOT misrepresent your income. Buyers often embellish the existence, continuance, source, or amount of income to qualify for more home than they can truly afford . This is Income fraud.

DO NOT deliberately misstate the intended use of a property. It is easy to retrieve your mail sent to your primary or secondary residence when you don’t actually reside there, but this is Occupancy Fraud.

DO NOT withhold or misrepresent the true nature of the transaction. Common examples include undisclosed agreements between parties, falsified down payments, or non-arm’s-length sales. You will be charged with Transaction Fraud.

DO NOT intentionally misrepresent information about the property or its value. Hiding elements of a property that may cause a difference in it’s value is a no-no. This is Property Fraud and will eventually brought to light when you try to sell the property.

DO NOT fail to disclose additional real estate debt or previous foreclosures. There are remedies to these issues that do not include hiding it or lying about it.

DO NOT alter your identity or credit history, and do not use a false identity. This is Identity Fraud.

Trust me when I say, it is not worth it. Find the right Realtor who will help you find a strategy in overcoming the obstacles standing between you and your dream home.

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