Obtaining a loan has become a challenge for many aspiring homeowners as lenders dramatically tighten their standards. In this economy, borrowers with a large down payment, solid credit and proof of income are hard to find, thus creating more incentive for unscrupulous mortgage lenders, brokers and borrowers to lie on loan applications.

According to the Federal Bureau of Investigation, mortgage fraud is "...any material misstatement, misrepresentation or omission relied upon by an underwriter or lender to fund, purchase or insure a loan." A recent report released by the Mortgage Research Institute stated that the number of mortgage fraud reports has increased by 26 percent from just last year.

Don't contribute to or become a victim of fraudulent mortgage or lending. Be on the lookout for the following predatory business practices:

Altered Paperwork
Borrowers and mortgage brokers alike may be tempted to fudge the facts about their employment history or income without considering the consequences. Mortgage fraud is a Federal offense and any mortgage application lie can get you into big trouble.

About 61 percent of all reported fraud was related to deceitful statements on mortgage applications. Common fraudulent adjustments include altering the source of the down payment, overstating incomes and lying about the length of employment.

Tip: Honesty is the best policy. Don't exaggerate your income or allow anyone, including your partner, realtor and/or mortgage broker talk you into making a false statement on your loan application. Work with Main Stream Financial to ensure you receive accurate mortgage information and a loan that fits your specific financial situation. Contact us today by calling 805-934-8607 or find us online at http://mainstreamfinancial.com.

Incomplete Paperwork
Do not leave signature lines or any other important line-item of any form blank. You may be asked to sign an incomplete disclosure packet; this may be an honest mistake, but whatever the case, do not sign. If you do, you may risk becoming a victim of mortgage fraud and be stuck with extremely high closing figures and a bad mortgage to boot.

Tip: Never sign an incomplete document or blank document. Look over the completed disclosure package carefully before signing in order to ensure your information is correct and to compare what you've been promised to the actual numbers and rates. Always review all loan documents before closing.

Phony Fees
Be on the lookout for hidden fees sprinkled throughout the paperwork. A dishonest mortgage broker and/or lender can easily include a bogus fee in the closing statement that you may not notice.

Tip: If you are having trouble understanding mortgage documents, seek help from an attorney to review them for you. Contact Main Stream Financial to discuss common closing fees and those that may be phony by calling 805-934-8607.

Inflated Home Prices
Beware of sellers who inflate the price of their home. In many mortgage fraud cases, the scamming seller pockets the difference between the home's actual market value and the inflated sale price. If the mortgage defaults, the lender forecloses and is unable to sell the property for the amount owed. In the wake of the "mortgage fraud" property sale, neighboring homes also become artificially inflated causing property taxes to rise.

Tip: Don't be caught in an inflated home price scam. Do your own research to uncover the true market value of the other homes in the neighborhood. Find out what homes in the area recently sold for by visiting with your Main Stream Financial mortgage specialist or a real estate agent. Also, look into recent tax assessments of neighborhood homes.

The majority of mortgage brokers are honest hardworking individuals; it is just the small percentage of brokers who have tainted the profession. It is important to know and trust your mortgage professional, appraiser and title companies you work with. For good measure, check the professionals' licenses with the state, county or city regulatory agencies to ensure you're working with an honest broker. If a mortgage program sounds too good to be true, it is likely a scam.

Keeping You Informed
Main Stream Financial is dedicated to keeping you informed of the latest market trends and mortgage options. Visit us online at http://mainstreamfinancial.com, or call today at 805-934-8607, to obtain custom loan options designed to fit your needs and help you obtain your home ownership goals.