Click Here

REALTORŪ Magazine Online: The real estate professional's business support tool.

OFFICIAL MAGAZINE OF THE NATIONAL ASSOCIATION OF REALTORS®

Daily Real Estate News  |  May 10, 2011  |   Mortgage Fraud Reaches Record High
Scammers are taking advantage of the real estate market, changing their schemes to take advantage of a distressed real estate market. Reports of mortgage fraud in 2010 reached the highest level on record, the Treasury Department reports.

Suspected mortgage fraud activity increased nearly 5 percent to 70,472 “suspicious activity reports,” according to the Financial Crimes Enforcement Network. That’s up from 67,507 in 2009 (and a dramatic increase when compared to 37,000 mortgage fraud reports in 2006 during the housing boom). The agency estimates more than $1.5 billion in losses from mortgage fraud in 2010.

Mortgage fraud reports include everything from borrowers falsifying information on loan documents, fraudulent appraisals, to elaborate schemes that target home owners underwater on their mortgage.

Reports of suspected mortgage fraud have continued to rise since the housing boom.

However, while the number of reports of mortgage fraud continues to rise, the number of fraud cases have actually decreased, the LexisNexis Mortgage Asset Research Institute reports. Mortgage fraud cases dropped 41 percent between 2009 and 2010, the biggest drop since the institute began to track reports. The drop was attributed to a decrease in home loans from banks tightened lending standards.

"We've got lower originations, less loan volume, less attention being paid to in terms of what's happening to those loans, and tighter credit scrutiny," says Denise James, who co-authored the report.

Where Fraud Is the Most Prevalent

The states with the highest incidence of mortgage fraud are:
  • Florida (which also led the nation in 2009)
  • New York
  • California
  • New Jersey
  • Maryland
  • Michigan
  • Virginia
  • Ohio
  • Colorado
  • Illinois
Source: “Reports of Mortgage Fraud Reach Record Level,” The Wall Street Journal (May 10, 2011) and “Reported Cases of Mortgage Fraud Down, But Actual Fraud Still on Rise, Experts Say,” Associated Press (May 9, 2011)

Read More




Browse all of today's news
E-mail this page to a friend
Give us feedback


Search news
Launch my search
 
Subscribe to news
Subscribe to News
Daily and weekly real estate news, trends, NAR press releases, convention coverage, plus exclusive features and columns.

RSS Feed
Get the Daily Real Estate News delivered straight to your desktop or news aggregator. (New to RSS? Learn the basics here.)
 
 
SHARE YOUR INSIGHTS
How did you sell it?
Tell us how you overcame hurdles to sell a challenging or very unique listing!