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OFFICIAL MAGAZINE OF THE NATIONAL ASSOCIATION OF REALTORS®

QUIZ: MORTGAGE FRAUD

 Mortgage fraud results in an estimated $4 billion to $6 billion in annual losses in the United States, and the number of cases reported continues to skyrocket each year. Mortgage fraud can encompass elaborate schemes that involve anything from inflated property values, undisclosed kickbacks, identity theft, and preying on home owners facing foreclosure. Even more alarming, sometimes the perpetrator may be your client. How much do you really know about mortgage fraud? Take the quiz below to test yourself.

1.Which of the following is a common type of mortgage fraud?
Property flipping
Equity skimming
Inflated appraisals
All of the Above


2.Mortgage fraud can involve a person with good credit who agrees to provide his or her name to help someone with bad credit to obtain a loan. What is that person usually referred to?
Impostor
Guarantor
Straw buyer
Grantor


3.Which government agency investigates mortgage fraud?
Internal Revenue Service
FBI
U.S. Secret Service
All of the Above


4.In a foreclosure rescue scam, home owners are often told that their homes can be saved from foreclosure if they do what?
Complete a short sale
Pay upfront fees and transfer the deed
Use a straw buyer
All of the Above


5.What is the mortgage fraud scam called when a buyer borrows the down payment from the seller without the lender's knowledge?
Equity skimming
Air loan
Silent Second
All of the Above


6.Which of the following constitutes mortgage fraud?
Selling a home for less than the seller's mortgage
Buyer immediately rents the property without notifying the lender
Borrower refinances mortgage every year
All of the Above


7.Which of the following items below could serve as a warning sign to possible mortgage fraud?
No money-down loans
Overstating income on documents
Signing a document containing blanks
All of the Above


8.What are the two distinct areas of mortgage fraud that the FBI investigates?
Bank fraud and illegal steering
Straw buying and bait and switch
Undisclosed kickbacks and electronic crimes
Fraud for profit and fraud for housing


9.Who are usually the perpetrators found to be involved in the majority of mortgage fraud losses?
Family members
Housing industry and mortgage professionals
College roommates
Ex-cons


10.What do many experts believe is the key to combating the majority of the largest losses from mortgage fraud?
Tougher penalties for perpetrators
Outlaw property flipping
Mandatory background checks for all parties
Accurate appraisals