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Identity Theft During Mortgage Application Process

Identity Theft During Mortgage Application Process

This BLOG On Identity Theft During Mortgage Application Process Was UPDATED January 19th, 2019

Identity theft is one of the fastest growing crimes in America and every consumer should always make sure that their personal credit information is not accessible to anyone.

  • Anyone can be a victim of identity theft
  • All the thief needs is the following:
    • Name
    • Social security number
    • Date of birth

And the thief can have a field day by opening fraudulent credit accounts

Damage And Outcome Of Identity Theft

Victims of identity theft often get the erroneous items corrected but comes with a price.

  • The outcome on the victim can be devastating and can plummet the victim’s credit scores
  • Worse yet, if the identity theft victim is in the process of purchasing a home, it will delay the victim’s mortgage application process for weeks and beyond 
  • It is almost impossible for a borrower to get a loan approval if they are a victim of identity theft until the credit report has been sorted out and resolved
  • Mortgage underwriters do not know what is fraudulent and what is legitimate
  • On another note, the true credit scores of the identity theft victim cannot be determined due to the drop in credit scores from the perpetrators fraudulent use of the victim’s credit

Discovering Being Victim Of Identity Theft

Victims of identity theft do not find out that they have been victimized until weeks or months after they have been the target of the thief.

  • Many do not find out until they apply for credit
  • The creditor tell them that they have not been paying their bills or that their credit scores are super low
  • The first thing  a victim of identity theft needs to do is to contact  local police department and file a police report
  • Make sure to make multiple copies of  police report
  • Keep the original in a safe place because police report will be ticket in solving identity issues
  • It may take days, weeks or months
  • Many victims of identity can have credit issues pop up years later
  • Only proof that victims have been victimized will be the police report
  • Victims need to get a copy of credit report from the three credit reporting agencies and review their credit
  • All of the fraudulent credit items need to be noted and need to write a letter to each of the three credit reporting agencies along with a copy of  credit report and tell them of being victim of theft
  • Victims also need to demand to the credit bureaus to immediately remove all the credit items that do not belong to victim including the late payments
  • I would also strongly recommend to request the three credit bureaus to place a fraud alert on credit reports which notify creditors to verify the credit applicants identification prior to extending new credit

How To Avoid Being A Victim Of Identity: Safeguard Personal Information

To avoid being a victim of identity, consumers need to safeguard personal information containing their name, social security number, date of birth, and address.

  • Never give out personal information out unless it is absolutely necessary such as applying for an automobile loan or mortgage loan application
  • Beware of ridiculous internet offers from the internet where they offer instant credit and need to provide credit information
  • Unless it is a lender, never provide anyone copies of your tax returns, W-2s,  bank statements, copies of credit reports or pay check stubs
  • Never throw out paperwork containing personal financial information unless being shredded 
  • Identity thieves usually go dumpster diving:  Going through garbage looking for paperwork containing people’s financial papers

Identity Victim:  Important Contact Information

Those who have been a victim need to file a complaint with the Federal Trade Commission after you get a police report from your local police department or Sheriff’s department.

If you live in a rural area, contact your local state police district.

Here is the Federal Trade Commission contact information:

Toll free phone at 1-877-438-4338

Identity Theft Clearinghouse
Federal Trade Commission
600 Pennsylvania Avenue, N.W.
Washington D.C.  20580

Credit Reporting Agencies: Experian, Equifax, Transunion

Also contact the three credit reporting agencies and request that fraud alerts be placed on your credit profile.  A fraud alert will alert the creditor you are applying for credit to contact you prior to granting credit.

Experian, PO Box 1017, Allen, TX 75013; 1888-397-3742

Equifax, P.O. Box 740250, Atlanta, GA 30374; 1-800-525-6285

TransUnion, P.O. Box 6790, Fullerton, CA 92634; 1-800-680-7289

Mail the three credit reporting agencies copies of your police reports and copies of your credit report containing the fraudulent credit items.  Circle the items that do not belong to you and demand to have them removed.

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