Mortgage Fraud

Mortgage fraud has wreaked havoc on neighborhoods, ruined credit standing, and caused millions of dollars in losses in Georgia.  In order to avoid becoming a victim of a mortgage fraud scheme, it is best to confirm that you are dealing with a reputable entity that is either licensed with the Department or exempt from licensure (such as a bank or credit union), ask questions about unusual or suspicious transactions, and be aware of any deal that sounds “too good to be true.”  If any mortgage loan originator, mortgage broker, or mortgage lender asks you to sign a document that contains a false statement, DO NOT SIGN.  Report the matter to the Department. 

You may report suspected mortgage fraud in Georgia to the Department by downloading and submitting the Reporting Mortgage Fraud Form.  Additionally, you may report suspected mortgage fraud to the United States Department of Justice at

Below are some of the most common fraud schemes that have come to the Department's attention based on previous complaints and reports:

  • Inflating property values in order to obtain a larger mortgage loan for a “straw borrower”;
  • Submitting bogus invoices for upgrades or renovations that have not taken place to falsely inflate the value of the property in order to obtain a larger mortgage;
  • Promising investors that properties will be leased or rented with paid mortgage expenses such as insurance, property tax, and other payments when no lease or agreement actually exists;
  • Paying straw borrowers or investors to sign and submit documents containing false qualifying information, such as counterfeit drivers’ licenses, pay stubs, tax returns, W-2 forms, rent checks, bank statements, earnest money checks, social security numbers, and verifications of deposits, employment, rent, or mortgage;
  • Advancing down payment amounts which are falsely attributed to the borrower;
  • Causing straw sellers and straw borrowers to fraudulently assume the identity of other people for the purpose of obtaining mortgage loan proceeds;
  • Providing quit claim deeds back to the seller or to a co-conspirator without notice or permission from the lender;
  • Filing false satisfaction, cancellation, and assignment of security deeds on a number of properties to eliminate the security interests of legitimate lenders, either by fraudulently transferring interest to a co-conspirator or by showing the property to be free of all mortgage liens before obtaining additional mortgage loans on the property; or
  • Filing false or forged quit claim deeds transferring the property from the true owners to straw sellers or straw borrowers, thereby gaining control of the property to use a security for fraudulent loans.

This is not intended to be an exhaustive list of potentially fraudulent schemes conducted by dishonest mortgage lenders, mortgage brokers, or mortgage loan originators.  You should consider referrals from friends and family when looking for a mortgage lender or mortgage broker.  Educate yourself about the process by using state and federal agency websites and brochures before you apply for a loan.  You should get information regarding mortgage loans from multiple lenders, brokers, or depository institutions. Do not hesitate to ask questions about terms, conditions, or other aspects of the loans.

Fannie Mae has provided additional information about the characteristics of common mortgage fraud schemes and red flags at .