Mortgage Fraud Tips and Information

Buying a house is challenging enough without having to worry about mortgage

fraud. The State of Colorado takes a tough stance against mortgage fraud and

requires licensure of all Colorado mortgage brokers.

 

Here are some tips to keep in mind to avoid mortgage fraud:

 

• Run, don’t walk, away from the situation if you are asked to inflate your

income on an application, provide false information, or sign documents

that contain blanks.

• You may want to seek a second opinion from an independent appraiser and

inspector because these professionals are often referred by real estate

agents or mortgage brokers.

• It is the mortgage broker’s duty to provide a transparent transaction. You

have the right to know how your mortgage broker is compensated for the

transaction.

• You should receive written disclosures at the beginning of the loan, when

the loan is locked in, and if the APR increases by more than 1/8 of a

percentage point.

• If your loan is denied, you may receive copies of the appraisal, credit report,

and title documents, but these documents will likely be subject to a fee.

The State of Colorado takes a tough stance against mortgage fraud and

requires licensure of Colorado mortgage brokers. Note that brokers who work

for state or federal banks or credit unions are currently exempt from

licensure, but are held to a similar standard as independent brokers.

How DORA Can Help:

Go to the Department of Regulatory Agencies website at www.dora.state.co.us

to find links to the following items:

• Verify a real estate or mortgage broker license - check for discipline.

• How to file a complaint against a real estate broker, mortgage broker, or

appraiser.

• How to file a complaint with the Division of Civil Rights for discrimination

or predatory lending.

• How to file a complaint against state-chartered commercial banks,

industrial banks, trust companies, and money order transmitters.

• How to file a complaint against state-chartered credit unions and savings

and loan associations.

• Frequently asked questions regarding credit unions and savings and loan associations.

 

From the Colorado Division of Real Estate, a division of the Department of Regulatory Agencies (DORA)