After rising every year from 2004 to 2011 – from just over 1.2 million to nearly four million – the number of foreclosures in the United States in 2012 dropped to 2.3 million. While there are lots of factors that come into play, including the fact that it has become a bit more difficult to get a bank loan and there is a lot of help to avoid foreclosure available, the number of people who lose their home is still quite high. One concern that banks and lenders alike might have is stop foreclosure fraud that could be problematic in a number of different ways.
When it comes to trying to stop foreclosure fraud could be a serious problem for homeowners because, quite simply, it makes it difficult for them to make the proper payments. In the United States, there are more than 11.5 million fraud victims every year and the average victimized person will lose nearly five thousand dollars. This could be quite problematic when it comes to making monthly mortgage payments, especially for families with tight budgets.
The biggest problem in regards to fraud and trying to help avoid foreclosure is that some homeowners will try to take advantage of filing for bankruptcy. Chapter 13 bankruptcy provides and opportunity for debtors to get some relief. Most of the time, they will be able to make a new loan agreement with their lender and pay off missed bills and interests over a period of up to five years. So bankruptcy might be the best option for avoiding foreclosure.
Unfortunately, lots of homeowners will try to take advantage of the system and commit bankruptcy fraud. Estimates from the U.S. Department of Justice have found that about one in every 10 bankruptcy filings has some element of fraud associated with it, so even though some might think filing for bankruptcy inappropriately is a dumb crime to commit, it is common. As a result, stop foreclosure fraud by filing for bankruptcy when it is not a legal option has become a popular white-collar crime.
The best way for home buyers to make sure that they never find themselves in a position where committing fraud to keep their home is possible is to simply be responsible. While there is often nothing that can be done about losing a job or other issues, using plenty of home buying tips and tricks when buying a home is a good idea. Doing so can go a long way towards finding an affordable home that won’t cause too much financial distress.