Even if you’ve never taken out a home equity line of credit, you may be vulnerable to HELOC fraud. There’s been a recent increase in the number of unauthorized home equity lines. With enough personal information, a criminal may be able to open a line of credit in your name and withdraw the funds without your knowledge.

CNBC reports:

“The FBI says HELOC thieves typically use stolen identification to apply online for a line of credit in your name. Then they instruct the bank to wire the funds to their accounts, providing their own contact information in place of yours. That way, the bank unwittingly contacts the thief to verify the electronic funds transfer.

Although the FBI does not track the dollar amount lost each year to mortgage fraud, incidents reported by financial institutions jumped a whopping 31 percent (from 35,617 to 46,717) in fiscal 2007, over the previous year. The sudden spike in HELOC fraud prompted the Mortgage Asset Research Institute, a Virginia-based organization that tracks mortgage fraud, to add identity theft as a category to track.”

According to the article, many experts believe that the shift to home equity fraud has happened because it is now more difficult for identity thieves to take out subprime loans in the name of less credit-worthy borrowers.

Protect yourself from home equity fraud by checking your credit report regularly. Everyone is entitled to see a copy of their report annually at no cost.

See Also:

New Program Detects HELOC Application Fraud

HELOC Identity Theft Scams

Tags | Heloc, heloc fraud, home equity line of credit, identity theft