Florida Attorney General warns Floridians about mortgage fraud
 
TALLAHASSEE, Fla. – Oct. 22, 2008 – In recognition of National Protect Your Identity Week, Oct. 19-25, Attorney General Bill McCollum issued a consumer advisory warning Floridians about mortgage fraud-related identity theft.

Mortgage fraud occurs when “straw borrowers” are recruited to perpetuate a mortgage scam on a lending institution. The straw borrower allows his or her good credit to be used, but typically ends up with ruined credit, significant debt and potential criminal charges.

However, mortgage fraud can also be perpetuated through criminal identity theft, which occurs when thieves steal a person’s identity or personal information and use that information to secure mortgages or other home loans.
 
“Identity theft can be one of the more personally damaging results of mortgage fraud,” says McCollum. “This financial destruction can ruin a person’s name, credit and other personal financial aspects, and may even result in litigation against a straw buyer engaged in a mortgage fraud scheme.”
 
Last month, McCollum sued 10 companies and 15 individuals for a $37 million mortgage fraud scheme using straw borrowers in Central Florida. In that case, the ringleaders allegedly defrauded banks by recruiting straw buyers with good credit to create false mortgage loan applications. The scammers also allegedly created fraudulent supporting documentation for the applications including bogus employment information. In many cases, the defendants failed to make the required mortgage payments on behalf of straw buyers and allowed at least 50 properties to fall into foreclosure. Six alleged straw borrowers are named as defendants in the Attorney General’s lawsuit.
 
Tips to avoid mortgage fraud-related identity theft and fraud from the U.S. Department of Housing and Urban Development include:
 
• Be wary of any attempt to persuade you to make a false statement on your loan application, such as overstating your income or the source of your downpayment, and failing to disclose the nature and amount of your debts or how long you have been employed. Lying on a mortgage application is fraud and may result in criminal penalties.
• Be wary of any attempt to persuade you to borrow more money than you know you can afford to repay.
• Never sign a blank document or a document containing blanks. If information is inserted by someone else after you have signed, you may still be bound to the terms of the contract.
• Read everything carefully and ask questions. Do not sign anything that you don’t understand.
• Be honest about your intention to occupy the house. Stating that you plan to live there when in fact you do not violates federal law.
 
Consumers who believe they may be victims of identity theft or fraud may contact the Attorney General’s fraud hotline at (866) 9-NO-SCAMor file a complaint online at http://myfloridalegal.com. Additional information about identity theft, tips to protect individuals and recovery information is available online at: http://myfloridalegal.com/identitytheft.
 

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