The Senate recently passed a bill that will help fight mortgage fraud over the next few years. With all the activity going on now, it’s easy for mortgage fraud to go overlooked or unnoticed. Low mortgage rates have sparked a new refi-boom and along with that, mortgage fraud has been on the rise, already claiming many victims.
This piece of legislation sets aside approximately $500 million to be spread out among several agencies, including the FBI’s mortgage fraud task force and the Department of Justice. Overall enforcement will be increased, and more resources and tools will be readily available for investigators and prosecutors to help battle the scammers.
This initiative is referred to as the Fraud Enforcement and Recovery Act, or FERA. Mortgage brokers or companies not regulated by the government now fall under current federal fraud laws in this act. Those who intend to defraud homeowners will be caught and severely punished.
What can you do to protect yourself? Simply go with your gut and trust your instincts. If an offer sounds too good to be true, it is. If someone requires you to pay unreasonable fees or point up-front in order to get a low rate, think twice about it. Mortgage fraud will always be a problem, but you can easily stay one step ahead of the bad guys.
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