Once the domain of home buying and home equity rip-offs during the boom market, mortgage fraud is muscling in on subprime loans, foreclosures, reverses mortgages and insider trading related to mortgage securities in housing's down market.

It's a real racket.

Now, homeowners down on their luck and facing foreclosure are also vulnerable targets cons want to exploit.

FBI Director Robert Mueller recently testified before Congress that a "tremendous surge" in mortgage fraud investigations forced the office to divert agents and resources from other areas of white collar crime.

Suspicious activity reports the FBI reviews for potential mortgage fraud have grown from 3,000 in fiscal year 2003 to 48,000 in fiscal year 2007. The FBI expectations more than 60,000 such reports this year.

And, say the G-men, the subprime crisis is aggravating matters as homeowners facing foreclosure look for relief wherever they can get it.

Here's how not to get taken.

• Don't be a rube. If it sounds too good to be true -- it probably is. Debts, bad credit and other financial holes didn't appear over night. They won't magically disappear over night.

• Be wary of strangers and unsolicited contacts, as well as high-pressure sales techniques. Avoid spam come-ons and web-based advertisements promoting the elimination of mortgage loans and credit card and other debts for an up-front fee to prepare documents to satisfy the debt. Beware of offers to "save" you from defaulting on loan payments or from foreclosure. Beware of zero-down loans and falsely altered information to qualify you for a loan. Don't borrow money you can't afford to repay.

• Don't be cajoled into making false statements on loan applications including overstating your income, the source of your down payment or the nature and length of your employment.

• Ask family, friends, co-workers and others you trust who also recently completed a satisfactory mortgage, for referrals to mortgage and other real estate professionals. That applies to loan modifications, work outs and "restructuring."

• Always shop for a lender by comparing all costs and terms. Don't be sucked in by lenders who tell you they are your last chance at home ownership.

• Don't sign blank documents, documents containing blank sections or documents you don't understand. Get help from trusted individuals to go over the terms of the deal.

• Examine for accuracy recent comparable sales, tax assessments and other documents that offer evidence of a home's true value.

• Review a property's title history to determine if the property has been sold multiple times recently and within a short period. That could be evidence the property has been "flipped" which can cause artificial value inflation.

• Do your home work and research home prices in the neighborhood before beginning the leg work of home buying.

• Obtain credit and financial counseling, attend home buying classes, seminars or workshops and otherwise bone up on your home buying education before taking the plunge.

Published: May 7, 2008

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A journalist for 35-years, Broderick Perkins parlayed an old-school daily newspaper career into a digital news service offering editorial content and consulting services. Perkins' San Jose, CA-based DeadlineNews Group includes the flagship news site, DeadlineNews.Com, offering real estate, personal finance and consumer journalism, and a backshop, the Deadline Newsroom.