A mortgage is a debt instrument, secured by the collateral of specified real estate property, that the borrower is obliged to pay back with a predetermined set of payments. Mortgages are used by individuals and businesses to make large purchases of property without paying the entire value of the purchase upfront.
Mortgages are also known as “liens against property” or “claims on property.” The creditor or lending institution holding the mortgage is called the mortgagee. The debtor or borrower is the mortgagor. The document that specifies the terms of the mortgage is the mortgage contract.
When mortgage debt is repaid in full, the mortgage is discharged. In some jurisdictions, discharges can be recorded in public records.
The basic features of a mortgage are:
• the amount of the loan, or mortgage principal
• the interest rate on the mortgage
• the term or length of the mortgage agreement
• the number of payments to be made, including the repayment of the loan principal
• the date of the first and last mortgage payments
• whether the interest on the mortgage is fixed or variable
Mortgage fraud is the crime of knowingly submitting false information in an effort to get a mortgage. It can include making false statements on a loan application, submitting bogus documents, or inflating the value of the property being purchased.
Mortgage fraud is a growing problem in the United States. In 2008, the FBI reported that mortgage fraud accounted for more than $1 billion in losses. The problem has only gotten worse in the years since then.
Mortgage fraud can be committed by anyone involved in the mortgage process, including borrowers, lenders, real estate agents, and appraisers.
Borrowers may commit mortgage fraud by lying about their income or by misrepresenting the condition of the property being purchased.
Lenders may commit mortgage fraud by falsifying loan documents or by approving loans that they know are likely to default.
Real estate agents may commit mortgage fraud by inflating the value of the property being sold or by steering borrowers to lenders who are likely to approve a fraudulent loan.
Appraisers may commit mortgage fraud by providing inflated appraisals.
If you suspect that someone is committing mortgage fraud, you should report it to the FBI or to your state’s Attorney General.
Mortgage modification may seem like an easy way out of a difficult financial situation, but it can be a risky proposition. Before you consider this option, take a look at all of your other available options and make sure that you will be able to handle the modified mortgage payments.