David Saks: Real Estate Practice : Lesson 3618 (Detecting Mortgage Fraud)

David Saks - Real Estate Broker - The Real Estate Mart of Tennessee, Inc. - 4040 North Watkins-Suite #4 - Memphis, Tennessee 38127 - Phone (901) 357-4663

Real Estate Practice : Lesson 3618 (Detecting Mortgage Fraud)



Watch Out For These Things When You Suspect Mortgage Fraud Is In the Air :

1 Huge price adjustments that don't click with

comparable market data with a request to alter the list

price so that it reflects an appraised value.


2 Some party to the transaction requires the use of a

particular appraiser.


3 Down payment assistance programs that charge

excessive fees and attempt to limit how their

participation shows up on the contract and the HUD-1.


4 Huge seller contributions disguised as large

decorator or improvement allowances.


5 Mortgage brokers who refer pre-qualified buyers to



6 Statements about the buyers occupancy that are

questionable. For example, if the buyer is keeping the

old property or there's a huge distance for the buyer to

travel to their place of employment.


7 The buyer's credit history sucks and existing history

is with subprime.


8 Credit history shows that the buyers repayment of a

prior loan didn't have any interest payments.


9 Ridiculous income level, such as "I work at the Silky

Schmegma Car Wash and make 135 thousand dollars a


10 Recent huge increase in income due to a raise or a

new job, such as " I received a 65 thousand dollar

bonus at the Silky Schmegma Car Wash this year".


11 The sales contract, the appraisal and the title don't

click with the seller's name and the appraisal shows

property or comps previously sold in past year. 


If you see these things in your transaction, tell your broker, immediately. 

Fraud won't be involved every time these warning signs appear, but being vigilant about it is the best defense, always.

Can you add anything to the list ?

David Saks

Time&Temp Memphis

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Comment balloon 1 commentDavid Saks • August 25 2014 04:34AM


David, You listed some great items to pay attention to and keep your eyes open for because each of these could potentially be red flags.

Posted by Sam Miller, Knox County Ohio Real Estate Specialist (RE/MAX Stars Realty) over 5 years ago

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