Mortgage Fraud - fastest growing white-collar crime in U.S.

MCS Lender offers you the best mortgage loan options you can find in Reno, NV.  Our industry, like so many others, has its problems and we want to address one here.

According to an article by Zoe Rose in the Reno Gazette Journal dated February 11, 2007, the FBI is calling mortgage fraud the fastest-growing white-collar crime in the U.S.   As J. Morgan Alexandra, who is a loan officer with First Horizon Home Loans in Reno, says, "People need to understand that any false statement made to a lender or false document presented or prepared is mortgage fraud and that's a federal crime."

Add to false documentation the mailing or wiring of misrepresented documents through the mail or by wire and you have now committed both mail and wire fraud, also federal felonies.

There are reasons why someone might want to misrepresent their information on a loan application.  Perhaps the buyer wants to rent the property but realizes that owner-occupied loans are less expensive.  They might take the opportunity to complete the form as an owner-occupied rather than as an investment property that rents out for non-owner occupation in order to get the lower interest rate.

Now how does this effect home buyers negatively?  When the type of loan is misrepresented, it creates a sense of false demand and it drives up real estate prices.  While this effects the buyer on the front end, it also effects them on the selling side, too.  When real estate prices decline, if the home owner is upside down in their mortgage, they are going to suffer if they have to sell.

For more information on mortgage fraud, check out the website:  www.stopmortgagefraud.com

For more information and education on the mortgage process, attend one of our free mortgage classes.  Let us know how we can help you navigate through the home buyer mortgage loan process.  We can make this painful and even fun!

Cindy Stephens

MCS Mortgage Company

www.mcslender.com

The Four C's: What Underwriters Look For

Credit, Capacity, Collateral, Character

Credit
A lender wants to know that you are a good credit risk. They determine this by looking at a current credit report. Your credit report is a "snap-shot" of your past and current debt, current available credit and a rating of your repayment history. Each credit bureau will "score" your history. Most "conforming" lenders require a score of 620 or above.

Capacity
This is simply a measure of your financial capacity to repay the requested loan. It is measured by dividing your total outstanding debts (including the new proposed payment) by your gross "useable" income. Most "conforming" lenders will allow 33% of your income to be used for housing expense and 36 - 41% for all obligations, including housing expense. These ratios are simply guidelines and may be "stretched" depending on the strength of the complete loan package.

Collateral
The lenders need to insure the property being held as collateral is structurally sound and the value is acceptable for the loan program requested.

Character
Character is a catchall phrase that is basically an underwriter's subjective determination of your overall financial picture. Generally they look at your job stability, probability of continued employment, ability to save money and your probable willingness and ability to pay back the money borrowed.

Knowing what the lenders are looking for will prepare you better for your next journey into home financing. Let us help. You can contact us at 774.823.9600.

Cindy Stephens
www.mcslenders.com

Welcome to M.C.S. Mortgage Company's Blog!

We at M.C.S. Mortgage want to invite you to visit our blog often. You can expect to find great times related to the real estate industry, learn how to better navigate the mortgage loan waters more safely, and find the right loan for you.

M.C.S. Mortgage Company focuses on customer service. In fact, it's i our name: M.C.S. = Mortgage Customer Service.

In a ever-changing market, let us help you on your home financing journey. We have several mortgage loan programs from which to choose, and we know there is one just right for you.

Give us a call at 775.823.9600 for the best home financing customer service in the Reno-Sparks, NV area.

Cindy Stephens
www.mcslender.com