Builders: Don’t forget Realtors brought you to the dance!

The housing recovery has picked up steam and new-home sales are returning to historical levels!

Sales of new single-family homes are up 28.9 percent from January 2012, to a seasonally adjusted annual rate of 437,000, according to a recent U.S. Census Bureau report. That’s the best January since 2008, and there’s plenty more room to run — new-home sales exceeded 1 million a year during the last boom. "It is safe to assume that new homes construction will continue to move forward, if not surge," said David Crowe, chief economist for the National Association of Home Builders.

It is also safe to assume that a growing number of homebuilders — but not most — will forget the Realtors who brought them to the dance. Studies by the National Association of Realtors say that 63 percent of all new homes sold to prospects were introduced to the homebuilders by Realtors.

According to Builder Homesite Inc., a consortium of 32 of the largest production homebuilder in the United States, 84 percent of all home shoppers contact a Realtor. Thus, many production homebuilders face an important business decision that affects their sales and relationships with the very Realtors they have worked so hard to nurture.

It appears that 2013 is the year that new homes have become a high-demand inventory choice, especially as resale inventory remains tight. So homebuilders, who have been profit-starved for years, must either accept the fact that it’s worth offering a consistent commission and co-broker policy to Realtors who introduce ready, willing and able prospects to new homes, or not.

If they are going to cut out real estate brokers, "a builder must assume that his product is so magnificent they no longer need access to the 90 percent of all buyers that typically engage Realtors during their search process," said Tim Wilcox, president of Irvine, Calif.-based Home Builder Media Group.

While history may repeat itself, this time there is no history to repeat. This is the first housing recovery in the history of the world that comes with a marketing booster rocket: the Internet.

The counterargument is that the builder can now attract more walk-ins and thus "save" on commissions paid to brokers. But a large proportion of "walk-in" buyers also have homes to sell and are already working with a Realtor — an issue homebuilders have no solution for. Homebuilders will also be the first to tell you that a large percentage of their walk-in traffic is not financially qualified, or is not actually in the market. In the old days, street signs drove a large portion of the traffic. Today, there is much less impulse traffic.

Homebuyers have seen the home, the floor plan, prices, features, an aerial of the location, on the Internet, long before they visit the community. "Tire kickers" tend not to want to get involved with a Realtor, and that’s a good thing. Realtors deal with this market every day. Homebuilders have had a long time to get to know Realtors and evaluate the impact they have on sales. Marketing commitments to the Realtor community are much deeper than any time in history. It is not a simple thing to dismantle Realtor marketing machines that are generating "first responder" prospects that are converting to buyers. Production builders are now using their "Internet advisers" to set appointments for Realtor prospects — an unheard-of concept before the Internet. They focus on the prospect, not the Realtor.

Homebuilders are accepting the fact that Realtors control the homebuyers, and are making it easier and faster for Realtors to get their ever-improving on-site teams in front of the Realtor’s prospect. The fact is Realtors need the inventory. Homebuilders need qualified prospects to assure continued momentum.

Realtors, sharpen your new homes showing skills.

Homebuilders, don’t leave your Realtor networks at the dance.

After all, they stood by you in the recent past when you couldn’t get a date!

 

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  How to Use Comparable Sales to Price Your Home

  Before you put your home up for sale, use the right comparable sales to find the perfect price. Read

Visit houselogic.com for more articles like this.

Copyright 2012 NATIONAL ASSOCIATION OF REALTORS®

The Complete Home Buyers Handbook

Insider's Guide to Saving Money &

Eliminating Risks When Buying Your First Home!

Chapter 2 – Finding A Realtor

If you are like many people, chances are that you’ve looked around different neighborhoods, saw a few homes that were for sale, maybe visited an open house or two, and then felt stuck.

What is the next step? Approach the homeowner with a potential offer? Visit a realtor for more information and help with the purchase?

Finding the right realtor when buying a home depends on what you are looking for in a home. You may have to visit several realtors before finding one that listens to your wants and needs.


After all, you could possibly be paying them a commission once you have found a home, so you should be comfortable working with them during the house hunting process.

Choosing A Realtor

There are a few ways to find a reliable realtor.  For example, you can:

• Ask friends and family for referrals.
• Search online for approved realtors.
• Attend a few open houses and meet realtors personally.
• Visit a local real estate office, or
• Look for local realtors in your neighborhood by paying attention to for sale signs in the neighborhood.

 

 

Asking plenty of questions before looking at houses may seem like a lot of work, but when you visit a realtor for the first time, you should think about questions that will help you get to know this person who is going to help you find your dream home.


The five best questions to ask are:

1. Are you a certified realtor?
2. How long have you been in the real estate business?
3. Which neighborhoods are you the most familiar with?
4. How many homes do you have that will fit my needs?
5. What is your typical commission on a home in my price range?

Once you have asked these questions, you should be looking for honest and complete answers, good communication, and honesty. These are questions that the realtor should have practice in answering and should not have to give you a standard ‘salesperson’ answer.

If you feel uncomfortable, remember that you are under no obligation to continue with this realtor unless they have some good property matches to show you, or have exclusive rights to show properties that you are interested in.

Normally, if a realtor does not have properties that fit what you are looking for, they will recommend you to another realtor in the group. This is also a good sign because it shows that the group is looking out for your interests and the interests of its employees.

You should also pay attention to:

• How well your realtor listens to what you are looking for.
• How well they understand current real estate law.
• How many other clients they seem to have.
• How they speak to their co workers.
• How often they communicate with you on the phone or email.

 

 

In the end, you will have to be the judge of the real estate agent. If they know what they are talking about, can find out the information you need quickly, and are willing to take the time to listen to what you need, then you should work very well with them.

In some cases, you may be asked to sign an agreement that states you will only be working with a specific real estate agency or agent when looking for a home. You are under no obligation to sign this paperwork and you should only do so if you feel very comfortable.  

While these agreements are not totally binding, it could make buying a home more difficult down the road. Only sign agreements if you feel comfortable.

During your search for a real estate agent, you will find a variety of agents that will want to work with you. These include:

• Experienced agents
• New agents
• Pushy agents
• Absentee agents, and
• Hard working agents

While all real estate agents have different personalities, you will have to decide which ones you will want to work with when looking for your new home.

Experienced Agents vs. New Agents

This is an age old debate that should be addressed. While an experienced agent may have sold more homes and earned more commissions, new agents can be just as helpful and need to get some sales under their belt, which may prompt them to work harder for you.

While you should ask about their experience, you should take into consideration other traits such as the ability to listen and the ability to only show you homes in your price range.

Experienced agents and new agents have been trained in a similar fashion and only have their personalities to bring to the table.

There are experienced agents out there who will drag their feet because they are over confident or they are not as interested in their jobs as they once were. Experienced agents may know more about different neighborhoods, but some of them are not as proactive as they used to be.

You should not let inexperience deter you when looking for an agent. Many times new agents will work harder because they want to gain a reputation that they can use to build confidence in their future clients

Pushy Agents

Unfortunately, you will meet real estate agents that will want to sell you more home than you need. In an effort to earn larger commissions or to sell those properties that are more difficult, many agents will try this tactic.

This is where you will need to stand firm. You do not want to waste your time looking at homes that are beyond your price range unless you can find a way to lower the price.

 

 

While looking at possible homes is exciting, this will not last long as you will grow weary of spending all of your available time looking for a home. If an agent keeps showing you homes that are out of your price range, then you should consider finding another agent. 

Absentee Agents

Absentee real estate agents are those agents who show you a few homes and then disappear for a few weeks. These agents may be overworked, may not be able to find a home in your price range or neighborhood, or have higher priced commissions to find. Whatever the reasons, this is unprofessional behavior and should be rectified immediately, especially if you need to find a home quickly.

If an agent does not have homes in your price range or neighborhood, they should recommend another agent in the group. Agencies never want to lose customers. If your agent does not do this, find a new one.

 

 

Even agents that are overworked have time to make a quick phone call. If you do not hear from your agent in a week after your last meeting, find another agent.

Hard Working Agents

These are the best agents to find when you are buying your first home. If you find an agent like this one, do not lose them. These are the agents that will follow every lead, pass your wants and needs to another agent, and try their best to find you a home. You should expect to see a handful of homes when working with an agent like this one.

Now that you know more about what to look for in a real estate agent, you should feel a little more comfortable about working with one. They can be an invaluable source of information when you want to know more about homes, neighborhoods, and other questions about the communities you are looking at.

When looking at homes with your real estate agent, you should ask questions about the home, the neighborhood, the city or town, and any other questions you need to know in order to make an informed decision. Part of your real estate agents job is to research homes and neighborhoods so that they can answer questions that may come up.

(Whew...where to stop on this subject! Keep reading...I promise it is informative!)

Preparing To See Homes With Your Realtor

Create A List

 

 

Once you have found a realtor you are comfortable with, you will want to make the most of your time when house hunting. Giving your realtor a list of what you are looking for will help narrow the search and save everyone some time. Your list should include:

• Your price range
• Number of bedrooms you want
• Number of bathrooms
• Size of property
• Basement (finished or unfinished)
• If you want a porch, patio or balcony
• Central heat and air conditioning
• Garage
• Neighborhood, and
• Any other amenities you would like

Giving your real estate agent a list of your preferences will allow them to spend more time researching homes that fit the criteria. You should list these amenities from greatest to least important because no home is perfect and you will not get everything you want or need. Let your agent know that you are flexible, but that you really want to concentrate on certain items when looking for a home.

Viewing Homes

When looking at homes with your agent, be sure to ask any questions you may have. While these questions may seem small, they may be important to your happiness. Common questions people ask their agents are:

• How old is the home?
• How many owners has the home had?
• What kinds of renovations have been done to the home?
• How old is the plumbing?
• How low are the sellers willing to go?
• How old is the carpeting and flooring?
• How old are the windows?

While your agent may answer some of these questions before you ask them, you should ask any questions that may influence your decision to buy a home. If you do not want to put too much work into fixing up the home, you may want to buy a home that is ten years old or less.

If your agent does not know all of the answers to your questions, they should be able to find out and will give you an answer within a day or two.

Taking Pictures

One of the best ways to remember the homes you have seen is to bring your camera and take pictures. Get permission from the agent first before taking pictures of another person’s home.

Many times, after looking at a few houses, you will forget how big the kitchen in home number two was in comparison to home number five. Having pictures will give you a better idea of the square footage and how much room you will have to work with.

Narrowing Down Your Choices

After a few weeks of viewing homes that fit what you are looking for, you should be close to finding a home that you will want to make a bid on. If you have other homes you would like to see or you have changed your mind as to what you are looking for, you should tell your agent so that they can look for other homes.

Many times, if a person likes the neighborhood but not the home they were shown, they will want to see other homes in the neighborhood that are for sale. You should ask to see all of the homes available in a neighborhood that you like.

If you are still not finding a home that you like, you may need to change the neighborhoods you are looking at. While this can seem disappointing, your real estate agent will be happy to show you homes in different neighborhoods. Sometimes if you compare homes to one another, you will find redeeming qualities in a home you have already seen.

Once you have found a home that you like, you should make an offer. Contact your agent as soon as you can so that they can draw up the paperwork, contact the buyer’s agent, and make an offer before another person does. Make an offer as soon as you can in order to avoid a bidding war.

Bidding can be long and drawn out in some cases. If you do not have the time to wait out a bid or if you cannot bid any higher, then you may be looking for another home to purchase. While this can set you back, you should try to stay positive and find a home that is right for you.

Your agent should be there to guide you along during this time. Ask all the questions you have to before making an offer on a home.

Information Realtors Should Tell You

There is plenty of information that realtors can tell you about the homes you will be viewing. Things they should tell you include:

• The price of the home
• The age of the home
• Any renovations that have been done
• Any other Issues with the home
• Property taxes
• Community dues
• Schools
• Neighborhood crime rates, and
• The median age of those who live in the neighborhood

Usually, if a realtor does not have the information you request on hand, they will be able to look it up once they are back at their office.

You should be able to find out all the information you need to know in order to make an informed decision about buying a home. Realtors are required by law to give you information concerning repairs, damage, and the history of a home.

This includes any incidents that have occurred inside the home such as criminal activity, fire, and other events.

You can also do a little research of your own by using the Internet, which has become a wonderful tool to use when searching for a home. You can research past events that have taken place in the neighborhood, the home itself, or the town where you want to live. Knowing a little history may prompt you to look elsewhere or make an offer.

Other information realtors can tell you include:

• Home owner price reduction (your realtor will talk with the seller’s realtor once you have made an offer or want to make an offer to see how low the owners will go to sell the home)
• Prices of other homes in the area that are comparable to the one you are looking into buying
• How quickly the owner wants or needs to sell their home
• How much you will have to pay in property taxes each year, on average
• Other taxes in the area

Your realtor is a person that should be well acquainted with the neighborhoods you are looking at when buying your first home. Don’t be afraid to ask many questions.

Working With Seller’s And Buyer’s Agents

As a home buyer, your real estate agent is considered the buyer’s agent. While some people will forego hiring an agent at first when looking for a home in order to save money on commission costs, they will usually end up hiring an agent to:

• Handle negotiations with sellers
• Do paperwork, and
• Survey neighborhoods

It is in your best interest to hire an agent in order to make buying a home a much easier, and faster process.

Negotiations With Sellers

Most people who sell their homes are also working with an agent. This agent is known as a seller’s agent. If you choose not to hire an agent, you will be dealing with a seller’s agent who is looking out for the home owner’s interests, and not yours.

Sometimes, though, the seller’s agent and the buyer’s agent can be the same agent. This means that your agent is looking after the interests of everyone involved. This is a rare occurrence, and it is best to hire a real estate agent that can negotiate with other agents in order to get you the best deal on a home.

Negotiating with agents can take a week or more depending on how high you are willing to go and how low the owners are willing to go. This can become a complicated game once you introduce home inspectors.

After an initial home inspection, if you feel there are repairs that should be made prior to the sale of the home, or if you want a price reduction because of the repairs you will have to make, you will have to negotiate with the owners to settle on a fair price. Without an agent, you will have to do all of this work yourself.

Paperwork

When buying a home, there is a lot of paperwork that must be completed before the closing. This paperwork can include:

• Offers
• Counteroffers
• Home inspection reports
• Home appraisal reports, and
• Fixture lists (Items that come with the home and items you would like removed)

Filing the paperwork is not difficult, but it can take some time. Working with an agent will save you time and money when creating and sending out various paperwork.

Survey Neighborhoods

Another advantage to hiring an agent is that you will not have to do as much legwork in the beginning. You may have a few neighborhoods in mind, but you will be able to leave it to your agent to find homes for sale and setting up appointments to see them.

This is another time saver especially if you have to work during the week. Taking time from your busy day to call other agents and homeowners to set up appointments will distract you from your other daily duties.

More Reasons To Hire A Real Estate Agent

There are several other reasons to hire a real estate agent.  These include:

Peace Of Mind

The bottom line is that as a buyer, a buyer’s agent is the best resource when it comes to finding and making an offer on a home. While a seller’s agent will be able to tell you the basics about a home, they are working for the homeowner.

They will not try to get you the lowest price for the home.

If you enjoy negotiating, then working with seller’s agents might be for you. But if you are like most people, hiring an agent to work on your side will make the entire process more enjoyable and worthwhile in the end.

Wealth Of Knowledge

Your agent will be very knowledgeable about negotiating the right price for your new home, they will be able to help you decide where you want to live, and they will be able to guide you in buying or walking away from any property you are not sure about. This is why it is so important to talk with your agent and ask as many questions as you can before buying a home.

Confidence

If you are having doubts about purchasing the home you have made an offer on, then you should tell your agent right away so that they can postpone the offer made and help you reexamine what it is you are looking for in a home. Many times the initial shock of being a homeowner can be overwhelming.

Sometimes talking with your agent is enough to resolve your feelings. Other times, you may need to see a few more homes before making a decision. Your agent will be able to give you practical advice during this time.

Next:   Chapter 3: Watching the Market

Be sure to follow so you don't miss the next one!

How To Sell Your Home Fast!

Selling your home fast doesn’t have to be an impossible endeavor.  In fact, even in today’s market you can still command a very reasonable price on your home within 90 days or less.  And if you follow some proven steps outlined below, your turn around time could be much faster than expected.

There may be various reasons that you want to get your home off the market as quickly as possible, so the principles offered here can work in nearly every situation.  So let’s look at some basic strategies that you can implement today to gain the most favorable results:

Staging Your Home Properly

This is one area where it may make sense to hire professional help.  Regardless, do your homework and take the time to find out exactly what can be done to make your property more marketable.  For example, be sure to strip away any of that stuff on the walls being used as "decorations" that is personal.  Also, place something of interest in each room that draws buyers in.

Additionally, people want to be able to picture themselves living in your space and visualizing where their own possessions will go.  So you need to clear out space and remove clutter, especially from public areas and closet spaces.  In fact, it is said that at least  1/3 of your own items should be placed somewhere else other then the home you are trying to sell.  We're selling floor space, after all.

Finally, maximize the use of lighting and make sure the house is spotless.  Most importantly, this goes for the kitchen and bathroom spaces which tend to endure a lot of wear and tear.  Patch any areas that need touch ups with some spackle, paint and caulk.  

Cut That Price

If you’re in a situation where you are moving and want to be rid of your property ASAP, then consider starting your list price at about 10% below its estimated value.  It’s better to start a little lower up front if you want to attract the attention of buyers and get quick offers. It can even bring multiple offers that could net you that 10% more! Your home will get the traffic you need to sell quickly!

This can also work much more effectively then dropping the price incrementally overtime.  In fact, the latter can even be harmful, because it may create the perception that nobody wants your property.  So make your listing competitive and be ready to entertain some early offers.

Do Your Research

People like things in writing.  Therefore, spend a little extra money to get an appraisal and inspection ahead of time, which you can offer at each showing.  This will build confidence with your buyers, since you will be providing the hard facts up front and you will show there is nothing to hide.

If you want to go the extra mile, you can even include receipts and/or documentation of repairs done on the home, as well as any new appliances that may have been purchased.  Your agent may also want to include information and statistics on the neighborhood as well.

Hire A Real Estate Agent With Proven Results

Did you know that the top 10% of agents produce 90% of the results?  Therefore, why hire a Realtor that can’t follow through on their commitment to sell, especially when time matters most?  You need a team to work on your side that knows your market and can command the best price for your home in a short period.

Also, it is vital that your agent has expertise in marketing your home both with traditional methods and using online strategies for maximum exposure.  Because information travels so quickly on the internet, it is crucial that you have property tours, videos, listing information, etc. are submitted to all the top traffic producing sites.  This will attract a high amount of responses and will help the word to travel quickly. 

Let my marketing ability help you sell quickly. During our private consultation, I'll show you quantifiable results along with a comprehensive marketing process that has helped other homeowners just like you get the results they desired.  I look forward to earning your business!  

 Testimonials: http://on.fb.me/qar1mv

3 Sources of Financing for Real Estate Investors

One of the most important aspects to investing in real estate is how to finance your property.  Although all other factors may look favorable, having little to no access to good terms could be a deal breaker.  So before doing anything else, it is important that you begin to line up some potential sources and explore what options are available to you.

There are various ways to start investing in homes, and each source has its own set of strengths and weaknesses.  Your exit strategy, the condition of the property and various other factors will play a part in how you may be able to finance each specific investment.  So let’s explore 3 of these top sources:

Traditional Financing

If one of your strategies is to buy, hold and rent, then using banks may be a safe bet for some of your investment properties.  This is a source that can be considered up front when a property is in considerably good condition.  Most banks will not support the financing of a fixer upper until repairs are completed, due to the amount of risk involved.

Therefore, you may need to spend a little extra time searching for those diamonds in the rough.  Traditional financing is extremely favorable, because you can usually get some of the best interest rates, terms and closing costs when approved.  The process certainly will take longer than using cash buyers or hard money lending for example, but it can be worth the wait.

Hard Money Lenders

For those who will either be flipping a property or would need to conduct significant repairs in order to refinance may want to consider building a relationship with a hard money lender.  It is advisable to shop around to at least 2 or 3 in your area when possible to see which terms you find to be most favorable.

These loans will come with much higher interest rates (typically 12% or more), points and some type of balloon payment near the end of the agreement.  Hard money may be offered for 6 months to a year while the repairs are made, until the home is ready to be sold or refinanced for better rates. 

It is important that investors are prepared to either rent out or lease-to-own their property if perhaps the home is unable to sell on the market quickly enough.  Also, newbie investors beware!  Flipping houses can be more difficult that it may seem, and you must have a solid plan in place so that you are not forced into a tight financial situation.

Private Lending

Before ever considering this option, it is strongly encouraged that you talk with a local attorney that specializes in SEC policies.  Laws can vary on a state by state basis, so it is important that you have a good understanding of those guidelines before building any relationships with private lenders.

However, when done correctly this can be a powerful resource available to you, that doesn’t require credit checks or adhering to all the strict guidelines enforced on mortgage companies.  Private lenders can be nearly anyone who has access to the necessary funds for your purchase (i.e. your doctor, friends, family, or investor club).

Typically private lenders can receive anywhere from around 9% and up for their investment, which is secured by the property and can be a great investment for them based on today’s rates.  Loans can be negotiated on a property by property basis so that each investor only funds the deals that they are comfortable with.

With these 3 examples alone, you may have all that is needed to start funding real estate deals.  So now you can take action and begin building the relationships and networks of lenders that you will need in order to start investing.

Are you in need of referrals?  If you need a list of preferred lenders that I  can recommend for your investment business, please feel free to send me an email: rhonda@rhondasrealestate.com.

Stopping Latest Fraud Wave Comes Down to Lenders

The ways in which the industry can prevent fraud are evolving along with the nature of fraud itself, and the answer to preventing one of the latest waves of fraud appears to lie in finding new and better ways to track participants and their information in distressed home sales as well as in mortgage transactions.

Addressing the types of deceptions seen today is a very different matter than when the housing industry was booming early last decade, and mortgage fraud was not scrutinized and investigated by federal agencies as persistently as today.

Between 2005 and 2007, Interthinx conducted an origination study and found fraud in 13% of the sample. Traditionally, the industry is around 1% to 2%, said Ann Fulmer, vice president of industry relations for Interthinx, and that is why people did not pay attention to mortgage fraud during the boom.

In contrast—with unemployment rising, home prices continuing to fall and defaulting properties still at high levels—today lenders have decided to crack down on mortgage fraud by reviewing various mortgage applications such as income documents and appraisals more thoroughly. These changes in policies and practices have forced fraudsters to be very clever when thinking of their next scheme that preys on vulnerable homeowners.

According to mortgage fraud analysts, one of the prevalent trends that has developed in response to this situation has involved “flopping” a distressed property for a lower price than what the lender is owed. The property being “flopped” is usually owned by an underwater borrower that can't afford to pay their mortgage, is facing foreclosure or is considering a short sale in which a real estate agent usually values the property to be less than what can be earned on the open market.

The lender agrees to take the lower price and the agent then purchases the property in his name or the name of a straw buyer who then decides to sell the asset to a non-arm's-length buyer, typically an investor, that the lender is unaware of for an inflated price either the same day or very soon after the initial sale.

Frank McKenna, vice president of fraud strategy at CoreLogic, said fraudsters make between $50,000 to $100,000 for “flopping” a single property. He added that lenders lose more than $375 million a year alone on single-family residences when they sell undervalued houses based on the broker price opinions submitted to them by the dishonest real estate agents.

“This has gotten to be quite a big problem and most borrowers don't know about it,” McKenna told National Mortgage News. “Shady, manipulative people are taking advantage of borrowers that are distressed in their property. They are going out there saying there is money to be made and I know there are a lot of unfortunate people who cannot afford to pay their mortgages, so I will take advantage of them as well as their lenders.”

With less than one out of 50 homes being “flopped” nationwide, representing less than 2%, McKenna said this trend is common today because of the number of properties that are in trouble throughout the country.

“Flopping also hurts neighbors because when you have a property that sells for an artificially low amount, it affects property valuations in an entire community and makes the market that you are living in less secure, causing lenders to have more scrutiny,” McKenna said.

Fulmer said default-related fraud schemes, predominantly short sales, are so popular today because the “flipping” portion of the scam (the higher-priced sale or sales that occur after the initial “flop,” when a lender unknowingly sells the property to a fraudster for a lower-than-market price) is generally an all-cash transaction difficult to track.

Fulmer said Interthinx is currently developing a short sale solution that looks for patterns to identify the participants in a transaction more quickly. She added that limited testing is being done right now and there is no specific date when this product will be available for servicers and lenders.

“Fraudsters do not go into a bank thinking they are going to lie to get a loan on a house they can't afford to buy,” Fulmer said. “They are coached by somebody. About 99.99% of borrowers are not criminals.”

In order to catch fraudsters, Fulmer believes it is important for lenders to go beyond just using automated technology to verify the paperwork that is submitted during the mortgage application process. She thinks that underwriters should be trained to analyze the documents to notice any possible sign of fabrication or forged signatures.

“It is a lot more sophisticated now because fraudsters are not using white out anymore, but Adobe Photoshop,” Fulmer said. “Underwriters should have a 'does this make sense” kind of approach when reviewing the documents.”

According to Fulmer, the biggest misrepresentation in forged documentation relates to an individual's income, both in the origination and loan modification sides.

“Sometimes, the false records are so obvious where a bank statement on the first page says one of four, but the second page says two of six,” Fulmer said. “We have seen cases where they have been absolutely fabricated and one of the tricks they like to do is use a false bank name with a made up address. It is important for lenders, risk managers and quality control people to start thinking like a criminal to keep bad loans from closing and preventing fraud from taking place.”

McKenna concurs with Fulmer that the primary way to stop mortgage fraud is for lenders to take on more responsibility before approving a loan or allowing funds to be disbursed from one person to another.

“Typically, when you have fraud, you will see something about a person, whether it is a real estate agent appraiser, broker or internal loan officer, who is exhibiting a pattern in the data that looks abnormal,” McKenna said. “We can make fraud much less commonplace by really scrutinizing people and the transactions by getting rid of the bad ones as often as we can. That will make fraud less common.”

Courtsey of Sr Mortgage Officer

Gina Starr

NMLS# 227483

Red Rock Mortgage & Lending LLC

405-210-3900

gstarr@redrocklend.com