Just when we thought that the miscreants who were largely responsible for the housing bubble & bust were gone from the mortgage lending industry, a story in the New York Times cites a report that says mortgage fraud actually rose by 45% during the second quarter of 2008 over 2007 levels. Considering lenders rarely pursue people who lie about their financial situations and instead bury their losses in higher fees and interest rates, is it any wonder borrowers and their enablers still try? From the story:
MORTGAGE volume may have fallen last year, but not incidences of fraud. In fact, according to a recent report from the Mortgage Asset Research Institute in Reston, Va., occurrences of fraud among loan officers, brokers and other industry professionals actually outpaced 2007 levels by 45 percent in the second quarter of 2008, the most recent reporting period.
The Research Institute, a consulting firm, does not release specific figures, which it compiles from surveys of lenders that make most of the nation’s mortgages each year.
The report, released in early December, found that 36 percent of the fraudulent mortgage activity involved loan professionals’ misrepresenting borrowers’ incomes, while another 20 percent involved misrepresentations of borrowers’ employment.
Lenders did not specify how much of this activity was simply stretching of the truth by loan professionals on the applications, categorized as “fraud for property,” as opposed to “fraud for profit” schemes, in which bogus loans are taken out to defraud lenders of money. Fraud for property is far more common.Click here for full story.
2 comments:
this is really bad if every month, every year our mortgages always increase... i wonder what the government is doing to avoid this catastrophe
The government has a plan it's called Obama's plant to home owners who can not pay their mortgages.
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