Buyer's Edge Realty in the News
Mortgage Fraud a Growing Trend
How to identify a fraudulent lender
Tarrytown, NY...(March 6, 2006)... In 2005, the FBI reported that it had received almost 22,000 reports of questionable real estate activity and that mortgage fraud is one of the “fastest growing white collar crimes in the United States.” The FBI also reported a loss of more than $1 billion for the fiscal year 2005 as a result of mortgage fraud. That number more than doubled from $429 million for the 2004 fiscal year.
Westchester County’s Department of Consumer Protection reported that one mortgage company “has agreed to a settlement of $325 million with 49 states for collecting excessive fees and interest rates. Many homeowners who could not afford to pay the loan and fee amounts charged were forced into foreclosure.”
Gary Herbst, an exclusive buyer’s agent and principal broker of Buyer’s Edge Realty in Tarrytown, knows that homebuyers without the proper resources and support can be deceived when going through the complicated process of buying a home. In order to educate Westchester County consumers about mortgage fraud and to help them protect themselves from unlawful activity, Herbst makes the following recommendations.
“If a lender asks you to lie about your income or work history, run the other way,” Herbst said. “And if the lender charges excessive fees or penalties, that’s a sure sign they are not conducting their business ethically - or within the law.”
Before making any calls to retain a lender’s services, Herbst recommends researching whether a mortgage lender has a valid license. To find out if a mortgage lender is licensed, log onto the National Association of Mortgage Brokers’ website, www.namb.org and click on the tab, “Find a NAMB Broker.” Members are required to adhere to a strict code of ethics.
A borrower should receive a Good Faith Estimate no later than three days after an application for a mortgage is filed. This report, required by law, provides the borrower with an estimate of the various costs associated with the loan, including taxes, title insurance, inspections taxes and other charges.
Additionally, if any of the loan terms are unclear, ask questions. Honest and principled lenders will be willing to explain the terms until the borrower fully understands them.
Be wary of internet-based mortgage lenders or those who solicit quotes via telephone. They are notorious for underestimating good faith estimates and providing deceptive rate quotes.
Additionally, if extra charges are incurred as a condition to a loan, that lender’s practices are unethical. Hidden fees are a good indication that the lender is a fraud.
Utilizing services of an exclusive buyer’s agency (EBA) will provide additional support to the home buyer. The EBA will not only make sound recommendations to the home buyer but will also assist in negotiations for the best mortgage rates and terms.
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About Buyer's Edge Realty Buyer’s Edge Realty, based in Tarrytown, N.Y., is an exclusive buyer’s agency – a real estate company dedicated solely to representing Westchester County, NY home buyers. Buyer’s Edge Realty does not list properties for sale, ensuring that only the interests of buyers are fully represented - never sellers - on any property. Buyer’s Edge Realty is compensated like any real estate company - at the closing through the proceeds of the transaction - so there is usually no additional cost for their services. Please log onto www.buyersedgerealty.com, or call 914.332.7100 for more information.
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