As was reported in numerous news outlets today a Long Island man has plead guilty to bank fraud related to a mortgage refinance scheme. As reported the scheme was as simple as it was devastating for its victims. The innocent homeowner-borrower would legitimately refinance their existing mortgage and then the defendant would divert the money to his personal accounts instead of to the original mortgage holder (lender).
This left the homeowner-borrower legally obligated to pay multiple mortgage payments and likely wiped out any equity the homeowner had in the property. Many victims fell into foreclosure.
How can a homeowner-borrower avoid being the victim of mortgage fraud when they refinance their home?
First, make sure the person and company that you are working with are licensed and have no complaints filed against them. Mortgage Brokers and Banks are licensed in New York by the New York State Department of Financial Services through the National Mortgage Licensing System. A homeowner-borrower should ask for the license number of their potential mortgage broker and contact those agencies to confirm the person is in fact licensed and no complaints have been filed against them.
Second consider retaining an attorney to represent you at the closing of your refinance loan. An attorney hired to represent you will be the only person at the closing without a conflict of interest and whose only obligation is to you, the client. An attorney can also help assure that the proper title insurance is in place to insure that the original loan will no longer be a lien on the property or obligation to you, the homeowner-borrower.
Beige Law has represented clients in all facets of real estate transactions and is ready as always to help homeowners successfully navigate their refinance.