Mortgage Calculator

The FBI says mortgage fraud is one of the fastest growing segments of fraud. This article explains common tactics used by unethical mortgage brokers. Here's the classic "bait and switch." Read the whole article to learn about other tactics.

Bait and switch. You know the term. It is most commonly used when a retailer advertises a great sale on a large screen television or new car. When the buyers flock to his store, that item is sold out or the ad was a mistake. However, the retailer has something “almost as good” that he will let go at a steal to make up for the confusion. Well this practice is rampant in lending as well.

Here are two examples of mortgage bait and switch.

A borrower commits to a mortgage under a set of terms: a certain interest rate, a fixed or adjustable mortgage with a specified frequency and method of adjustment; length of loan; and so forth. Then, at the closing table, the borrower realizes that the loan documents specify a higher rate, more frequent adjustment, a five year note with a balloon or other terms to which he was sure he had not agreed.

Related Products: Visit our store

Read more from this blogger: Mortgage Fraud - Part 2