The Rise Of Mortgage Fraud In America
Ripening Conditions for Real Estate Fraud
Since 2007,mortgage fraud
and related crime numbers have soared across the United States as housing market profits have plummeted. The equation is not as simple as need plus greed for dollars. Several conditions converged to make the time right for real estate fraud schemes to triumph. The sharp increase in criminal activity, however, made the federal government sit up and take notice, and step in. The Federal Bureau of Investigation (FBI) has been battling the crime wave intensely and is beginning to make headway in prosecuting offenders in court.
Some states, such as Florida and Georgia, are harder hit than others, probably because mortgage fraud was already growing in those areas when the subprime lending market collapsed. With the housing market in a tailspin, the proliferation of refinancing and home foreclosures opened up new avenues to those looking to make a buck off of the system. Homeowners took a big hit, but the economy at large suffered shockwaves as well. FBI sources estimate losses to owners and lenders in the billion-dollar range, and the figure continues to climb.
Wire Fraud and Cash Back Schemes
Mortgage fraud practices already in place enjoyed willing victims who were caught up in the anxiety of having to sell their homes in the down market. Property sellers were thrilled to be approached by willing, qualified buyers, and ecstatic when the scheme organizers promised a much larger return on the sale than expected. This might ostensibly come in the form of lower mortgage payments or an under-the-table cash back bonus if the seller agreed to inflate the price of the property. Some individuals, posing as legitimate buyers, do so in order to turn the property over quickly at a higher payoff.
Property flipping, inflated appraisals and inflated loan approvals became even more popular the lower the market sank. Many home buyers who became unwitting partners in such schemes found their property in foreclosure
and criminal charges pending, sometimes due to a simple tampering with their loan applications.
Continue Reading About The Rise In Mortgage Fraud In America >>