Guard against mortgage fraudIt's on the rise, with seniors and first-time home buyers most at risk. Here are the red flags to watch for. By Gerri Willis, CNN October 12 2006: 1:07 PM EDT

NEW YORK (CNNMoney.com) -- Mortgage fraud is one of the fastest growing white collar crimes, according to the FBI, with reports more than quadrupling since 2001.

Mortgage fraud refers to a whole host of scams, but the bottom line is that most cases involve inflating the value of a property for more than its worth, with the scammer pocketing the difference.

In today's tips we'll tell you how you can avoid these schemes.

1: Get the sting

It really takes a village to commit mortgage fraud. First of all you need an appraiser or a bank official who validates the inflated property price. Keep in mind it can be hard to tell what IS artificially inflated since property values have increased so dramatically in some markets.

When the buyer unknowingly pays this higher price, the scammer's profit is then locked in. And all along, the lender either must not be aware of, or turn a blind eye to the scam.

2: Protect the vulnerable

Watch out for mom and dad. The people most at risk of falling victim to mortgage scams are older folks. First time homebuyers too can be easy prey. Here are some of the states where mortgage fraud is most common: California, Florida, Illinois, Arizona and Nevada.

3: Recognize the red flags

Remember, scammers are usually real estate insiders, so recognizing a scheme may be harder than you think. But there are some red flags you should look for.

Here's one of them: Your broker insists you use a specific lender. The bottom line here is that a broker shouldn't care what lender you choose. That's your right.

Another red flag: Lenders who encourage you to borrow more than you can afford. You should have a clear handle on what your financial comfort zone is.

You should also sound the alarm if you are not given copies of loan documents you sign. This is generally a routine practice.

And finally - don't be rushed. A loan officer shouldn't rush you through the process. Don't feel pressure to sign anything without reviewing the forms.

4: Bypass the Scammers

To avoid falling victim to mortgage fraud, never buy a property without seeing it first. Hire your own appraiser. Fraudsters pay appraisers for the report they want. If you have questions about how the property was appraised, call the US Housing and Urban Development Department at 800-569-4287 or go to HUD.gov. This organization can help you figure out if your home was appraised appropriately.

Gerri's Mailbox: Got questions about your money? We want to hear them! Send e-mails to toptips@cnn.com or click here - each week, we'll answer questions on CNN, Headline News and CNNMoney.com.