Mortgage Fraud: The Fastest-Growing Type of Identity Theft

One day, a homeowner in Nevada answered a knock on his door to find a County Sheriff with an eviction notice on his front steps. The man was shocked to learn that he and his family, along with their possessions, were facing eviction for failing to make mortgage payments on a paid-off home.

Criminals gain access to homeowners' personal information, obtain mortgage financing in their names, take the money, and then default on the loan, causing homeowners to be evicted from their own homes. In nearly every case of mortgage fraud identity theft, the victims are unaware that thieves have obtained mortgage financing on their homes until law enforcement officials appear to evict them. As the collection and eviction notices go to other addresses, homeowners have no inkling that there are liens placed on their homes. By the time the sheriffs show up, the thieves are long gone.

Thieves can net tens of thousands of dollars in these swindles, so they often construct elaborate scams in which victims think they've won cash prizes, cars, and other high-value — but non-existent — items.

One case of mortgage fraud identity theft involved six people who placed ads in newspapers about job openings for well-paying positions. Victims filled out what they thought were job applications, and thieves took the information to obtain more than $5.7 million in mortgages and other lines of credit. Authorities ultimately caught and indicted the thieves.

Another popular mortgage fraud scam preys on homeowners who are having problems making their monthly mortgage payments. Thieves rent office space and pose as mortgage adjusters to help troubled homeowners refinance their mortgages. They make victims submit their Social Security numbers and other personal information, charging a fee of several hundred dollars, and victims unsuspectingly pay these criminals to take their homes, ruin their credit, and turn them out of their own homes.

Homeowners — especially homeowners who are struggling with mortgage payments — are advised to thoroughly research any firms that promise to help them get out out debt, reduce their monthly payments, or perform any other service that sounds too good to be true before entering into any agreement with that firm. And every consumer, homeowner or otherwise, is strongly urged not to share his or her Social Security number with any entity unless required to do so by law.