Mortgage & Finance

According to Freddie Mac, mortgage rates have gone down to 6.26%, which is still high. Last year at this time, rates were 6.9% on a 30-year mortgage. Rates have been higher than that low all year.

For most, renting is cheaper than buying.

Mortgage fraud is in the news, with politicians and political appointees being accused of having multiple primary residences on loan applications. Interest rates are generally lower on primary residences.

This isn’t meant to be a how-to to but here are some common forms of mortgage fraud:

Mortgage Fraud

Mortgage transactions provide ample opportunities for fraud. They do so because they involve multiple parties and large sums of money. These transactions are part of the lending process for buying a home. Some such schemes are sophisticated and unique, but the following types are the most common:

• Fraudulent Supporting Loan Documentation: A loan applicant submits forged or altered paycheck stubs. They might submit other fraudulent documentation.
• Property Flipping: A piece of real estate is purchased, appraised at a falsely inflated value, and then quickly resold. The fraudulent appraisal makes this practice illegal, as “flipping” during a housing boom is not necessarily illegal.
• Straw Buyers: The borrower’s identity is concealed through the use of a nominee, whose name is used for credit history on the loan application.
• Silent Second: The buyer takes out a second mortgage to cover the down payment on the initial loan. It is illegal because the second, smaller loan is taken out without the initial lender’s knowledge.
• Stolen Identity: A mortgage loan applicant uses a fictitious or stolen identity. If stolen, the true person’s name, personal information, and credit history are used without their knowledge. This variety of mortgage fraud involves identity theft.
• Equity Skimming: An investor uses a straw buyer, false credit reports, and false income documents to get a mortgage in the straw buyer’s name. The straw buyer signs the property over to the investor after closing, relinquishing all property rights. The investor makes no payments but rents the property until it is foreclosed.
• Inflated Appraisal: The appraiser, colluding with the mortgage broker and/or loan officer, provides unrealistically high appraisal value to match the buyer’s offer and complete the deal.

Mortgage fraud is illegal, and there are various penalties at the state and federal level, up to and including large fines and prison sentences. The specific penalties depend on the federal or state laws violated, the amount of money involved, the defendant’s criminal history, and the sophistication of the scheme. 

You can’t make me say that now is a good time to buy a house. It depends on who you are and why you want to buy. People who need a place to live for a few years should consider renting. Yes, rates are lower than they were, but with the high price of houses, mortgage interest rates have made owning a home unaffordable for many.

Even though the president of the US was going to make everything more affordable, it isn’t happening, nor will it.

This just in from the National Association of Realtors:

NAR Applauds FHFA Move to Expand Credit Scoring Models for Mortgage Underwriting

WASHINGTON (July 9, 2025) — National Association of Realtors® Executive Vice President and Chief Advocacy Officer Shannon McGahn released the following statement in response to yesterday’s announcement by Federal Housing Finance Agency (FHFA) Director Bill Pulte that, effective immediately, Fannie Mae and Freddie Mac will allow mortgage lenders to use VantageScore credit ratings—alongside or in place of traditional FICO scores—when assessing borrower creditworthiness:

“The National Association of Realtors® has long called for modernizing the credit scoring system to better reflect how today’s consumers manage their finances. We applaud the announcement from FHFA Director Bill Pulte that the GSEs will soon begin accepting VantageScore in addition to other credit scoring models.

“This is a major step toward a more accurate and equitable mortgage underwriting process, one that considers timely rent, utility, and telecom payments as indicators of creditworthiness. These are real-world factors that show how people pay their bills and should count when determining if someone qualifies for a mortgage.

“Expanding the number of acceptable credit scoring models also fosters competition in credit reporting, which will lower costs, increase accuracy, and ultimately help more qualified Americans achieve homeownership.”

. . . if you ask me, and no one ever has our whole system is rigged when a large private company like, say, Experian, is allowed to collect and hold private data about our spending habits, without our permission, and then use the data to create scores using their own scoring system. Scores that determine if people can get a loan, or a credit card or how much interest they will pay.

There are data breaches regularly where our data is exposed to criminals.

Maybe being able to use the “VantageScore” will help.

Mortgage interest rates were in the news last week because they went down slightly. People seem to be quite enthusiastic about lower rates. I guess lower is better than higher, but they are still too high.

Sure, mortgage interest rates have been higher. Home prices have been lower too.