"True Level Of Mortgage Fraud Unknown": FBI
It isn't just lending standards that have gotten weak, mortgage fraud enforcement has been lost in the home price boom. Inman News, "The FBI identified 26 different states as having significant mortgage fraud problems."
"The top 10 states for mortgage fraud are California, Nevada, Utah, Colorado, Missouri, Illinois, Georgia, South Carolina and Michigan."
"80 percent of all reported fraud losses involve collaboration or collusion by industry insiders, the report concluded. Such forms of mortgage fraud involve falsely inflating the value of the property, or issuing loans based on fictitious properties."
"The report noted that 'a significant portion of the mortgage industry is void of any mandatory fraud reporting. In addition, mortgage fraud in the secondary market is often under reported. Therefore, the true level of mortgage fraud is largely unknown. The mortgage industry itself does not provide estimates on total industry fraud.'"
3 Comments:
The scary part is most of this fraud comes out of the woodwork after the shit hits the fan. For now much of it is masked in continued appreciation in the frothy markets most prone to fraud.
john,
i posted a comment last night about how i remembered mortgage and bank officers being led away in handcuffs in massachusetts in the late 80's. most mortgage participants in their 20s or 30s have never seen anything but an up market, so fraud has always been glossed over by a bouyant market.
What do you mean weak lending standards? This all seems very normal:
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