 | Daily Real Estate News | June 3, 2008 |
Where Mortgage Fraud is Prevalent
Mortgage fraud cases are up all over the country, with FBI investigations rising to 1,380 from 818 in fiscal 2006. Many perpetrators were home buyers who inflated their incomes or credit status to obtain mortgages; while other schemes involved teams of real estate brokers, appraisers, and "straw buyers" who never had any intention of living in the properties.
With local home prices up 40 percent in 2004, FBI agent Scott Hunter is not surprised that speculators flocked to Las Vegas to make money, calling the city "mortgage fraud ground zero."
He notes, "We've got people who walked into neighborhoods who paid $200,000 to $400,000 more than they every should have paid. . . . Everybody thought the market was hot, but a lot of that was being manipulated."
In addition to lender losses, fraud results in reduced property values and leaves home owners owing more than their properties are worth.
Nationwide, MortgageDaily.com says fraudulent mortgages topped $4 billion last year from $1.6 billion the prior year.
Source: USA Today, Greg Farrell (06/03/08)
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