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Keith McCord ReportingBeing number one at something is usually a good thing, but not in this case. Utah is at the top of the list for mortgage fraud in the United States.
This certainly is not something to be proud of. In the end, it costs us more money. Statistics show, Utah consumers end up paying higher interest rates because of the number of mortgage fraud cases here.
Just what is mortgage fraud? It shows up in a number of ways, and Utah has been one of the top five states for such fraud for the past several years. Now Utah is number one. Loan officer Matt Arnold with Christian Roberts Mortgage said, "The biggest thing against mortgage fraud in Utah, and the reason why it's been ramping up is, to be honest, is lack of consequences."
Arnold says Utah needs stronger laws to discourage unscrupulous mortgage activity. Mortgage fraud has become a huge problem, not just in Utah, but in the entire country. The FBI says in 1999 there were 3,000 cases; in 2005, more than 22-thousand cases.
Here are some examples of mortgage fraud.
1. Buyers who lie on a loan application. For example, inflating their income so they'll qualify for a loan that they'll ultimately default on. "Inflate their assets and their income to qualify for a home they have no business living in," Arnold said.
2. Another type is when a person uses someone else's identity to qualify for a loan
3. Lenders can also commit fraud by doctoring the paperwork to make sure an applicant qualifies.
Sheri Fitzpatrick, CEO of Perfect Home Living Inc., said, "Just make sure that everything on that application is truthful, that your assets have been properly stated, that you income has been properly stated. If you don't make $10,000 a month, don't sign a document that says you do."
Some advice to anyone applying for a mortgage loan is to make sure it's correct and ask questions if you don't understand what you're getting into. "The biggest piece of advice that I would give any person on the street, is rather than shop a mortgage, shop your broker, because if you're dealing with somebody that was hanging drywall two weeks ago and is now writing mortgage loans, you shouldn't be using him."
The bottom line is to ask lots of questions when you are trying to get a loan for a home. And, remember the old adage, "If it sounds too good to be true, than it probably is.
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