Last week, we met the Georgia Real Estate Fraud Coalition. We looked at a list of suggested things borrowers can do to help protect themselves from getting involved with fraudulent loans. This week, we need to cover the list of things NOT to do when buying a home. Again, the suggestions are theirs, while the explanations are mine:

* Don’t create a false identity or use someone else's identity or social security number to obtain a loan. And don’t provide, or pay anyone else to provide, false information about your employment, income, credit or bank accounts.

There is no way to describe these activities except as criminal.

* Don’t accept payment for use of your name, credit or social security number.

Amazingly, this is how a lot of mortgage fraud begins. Regardless of what you are told, you will personally be fully responsible for any loan made in your name.

* Don’t close a loan that you know has false or misleading information including appraisals with inflated values, down payment or earnest money that did not come from you, or rental leases that you believe to be inaccurate.

Knowingly closing a conventional loan under false pretenses is a federal crime.

* Don’t pay your earnest money or your down payment to anyone other than your real estate agent or the seller of the home you are purchasing.

Real estate agents are required, under Georgia law, to deposit earnest money into their broker’s escrow trust account, where it is subject to audit by the Georgia Real Estate Commission. In contrast, scammers often use earnest monies and down payment funds to make illegal payments to those providing services to the scammers.

* Don’t let anyone sign anything for you during the loan process without your written approval and authorization. Take time to consider the power you are giving this person when you authorize them to sign for you.

Oftentimes, a mortgage fraudster will offer to pay you a large sum of money if you will provide your name, your good credit, and your social security number. Then, he asks you to sign a "Limited Power of Attorney" granting another person the authority to sign any and all documents on your behalf.

This document allows him to legally act on your behalf as it relates to this particular loan application, make false statements and swear that they are true, and possibly even go so far as to close the loan in your name without your even being there.

Never sign any form of "power of attorney" unless you completely trust the person you are appointing to act in your absence. In fact, I will go farther than that. My advice is to never sign any power of attorney unless it is absolutely impossible for you to personally endorse the documents that need your signature.

In almost every case I can imagine, a power of attorney can be avoided by sending the documents overnight or by a personal signature on your part. Only in an unusual circumstance, involving unavoidable scheduling and travel conflicts, is a power of attorney necessary for a borrower.

* Don’t expect to get "paid" for purchasing a home. You should be bringing a certified check to closing in order to buy the home.

Even if you have qualified for 100% financing and even if the seller is paying your settlement costs, you will still probably need to bring funds to closing to pay for your escrow set-up and your prepaid items, such as taxes and insurance.

And if the seller has promised you some sort of payment after the closing takes place, you should be aware that these types of payments are considered "kick-backs," and are illegal unless disclosed in the contract and on the settlement statement.

* Don’t pay anyone additional fees or costs associated with the loan closing or application process after the loan closes. If someone asks you to do this, refuse and obtain legal advice.

As in the last "don’t," this should be fairly obvious. Scammers sometimes pay a fee to the borrower with the understanding that a portion of that money is to be paid to another member of the criminal enterprise.

Mortgage fraud often involves a number of willing accomplices, and can include the borrower, the seller, the real estate agent, the loan originator, the appraiser, and even the closing attorney. It is not unusual that all of these parties would expect a piece of the ill-gotten gains in exchange for their participation in the fraud.

If any of these recommendations cause you to wonder about a loan that involves you, my advice is to call your attorney and make sure that no fraud is involved. For more info, visit www.grefpac.org.