dcsimg

Mortgage Fraud Still Exists

Posted on April 29 By Justin McHood

Think mortgage fraud is something that happened in the past?

Think again. Mortgage fraud still exists and according to the latest statistics from MARI, it has actually risen in some areas of the country. CNN Money has recently published the top 10 states for mortgage fraud and many of the usual suspects are still on there. Three "sand states" (Florida, Arizona, California) are all in the top 10 and according to the experts, even the numbers that are reported may be under-stating the problem.

"We believe that mortgage fraud is significantly understated..."

Were the words of Jennifer Butts of LexisNexis Mortgage Asset Research, the numbers may actually be under-stated because fraud isn't usually detected until a loan goes bad.

Another thing to note is that the face of mortgage fraud has changed as the housing market has changed. As the market has turned, mortgage fraud is not the same type of mortgage fraud that was happening during the housing boom.

The nature of fraud has changed somewhat since the housing bust, according to Denise James of LexisNexis Risk Solutions. "New trends continue to emerge," she said.

With the explosion in foreclosures in many U.S. communities, for example, foreclosure rescue scams are proliferating.

One example of this kind of crime occurs when scam artists convince distressed owners to sign over their deeds, which the scammers claim they need to keep the homes out of foreclosure.

The scammers then turn around and sell the homes to straw buyers, financing the sales with inflated appraisals. They get, say, an appraisal of $100,000 for a house worth $30,000. When the deal closes, they take the cash and walk away, failing to make any payments. That sticks the banks with properties worth far less than they gave out in mortgage loans.

With more than a million foreclosures expected to happen in 2010, it is clear that mortgage fraud is not helping solve the mortgage problem and is only contributing to it. Will the regulators be able to help curb mortgage fraud going forward? It doesn't look very promising from my point of view.

This entry is filed under Mortgage fraud . You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response.
National Mortgage Rates National Refinance Rates
3.07%
Compare Local Rates

0 Responses to "Mortgage Fraud Still Exists"

No Comments

Leave a Comment
 
 
 
Get Mortgage Loan Quotes Now
  • Free Quotes
  • No Hidden Fees
  • No Obligations
  • Refinance
  • New Home Loan
  • Home Equity
  • Debt Consolidation
  • FHA Loan Orientation Guide
  • FHA Loan Orientation Guide

    Use our FHA Guide to find answers to all questions related to FHA loan.

    Click here to Download

Compare Mortgage Rates