May 2007
"How to Avoid ID Theft When You Apply for a Morgage Loan"
You've heard the horror stories and want to protect yourself. You're careful about where you put your information, who gets your information, and where you store your passwords. You limit the information you have online to the bare minimum. And now you're buying a home.
The home loan application asks for information you normally don't share. And while you realize that you won't be able to borrow a significant amount of money without building a strong credit file, you wonder who gets all that information, and how many hands it goes through before you get to the closing table.
You're not alone. With ID theft the fastest growing crime today, people should be scrambling to take every security measure they know of to protect their personal information. But a mortgage application asks for lots of information. How can you know you're safe in giving all that information to a loan officer? Good question.
Here are 6 precautions you can take to protect yourself from identity theft during the home loan process:
1. Know your lender. If you choose to apply with a mortgage broker, get at least three references, (preferably references you know so that the broker isn't giving you the names of 3 of his buddies). Applying with a financial institution with which you already have a relationship, such as the credit union, is your best bet.
2. Know what information you need to provide...and what you don't. The standard home loan application is called the 1003, or the Uniform Residential Mortgage Application. It's a long form that's folded into 2 legal-sized pages. You'll need to complete that, front and back. Read any additional forms before filling them out.
3. Keep your eyes open. If something doesn't look or sound right, don't be afraid to ask questions. As Neal O'Farrel, Identity Theft expert puts it, it's OK to be paranoid (actually, it's a good idea to be paranoid) when it comes to identity theft.
4. Never apply for a mortgage loan online unless:
a. You went to the web site yourself (as opposed to being sent to it through another site or e-mail link)
b. You know the lender you're applying with. Responding to an e-mail you received is not a
good idea because it may be a scheme. On the other hand, if you key in the credit union's
URL and follow the link to apply for a home loan online, you should be fine.
5. Never apply for an online home loan without protection. Even if you've followed the tips above, you shouldn't consider putting all that information online without having solid firewall and encryption software.
6. During the home loan process, let your processor know you prefer to communicate via phone or in person. When you begin exchanging information online, even with someone you know and trust and with a firewall protecting you, you may let your guard down and give too much information to the wrong person. Your best bet is to keep communications with your loan originator and/or processor offline.
As long as you work with a legitimate lender and take common sense precautions, your information will be kept confidential. If you have any concerns, come into the credit union. We'll be happy to discuss with you the possibility of identity theft-and how to protect yourself. Call Cindy Kendall at 789-3117 for more information on the Great Basin FCU mortgage program.
