Washington is a state where reports of mortgage went down in the previous year. Mortgage fraud kept escalating as a problem within America in the year 2008. Even though there was no central repository when it came to collecting complaints of mortgage fraud, almost every industry and law statistic indicated a rise in activity when it came to mortgage fraud.
Reports have shown losses of at least 1.5 billion dollars, more than eighty percent higher compared to the last fiscal year. Plus, losses for the initial six months of this fiscal year were higher by more than two hundred million dollars compared to the exact same period last year.
When it comes to states, reports have cited information from providers of tools of regulatory compliance and risk mitigation to the industry of financial services.
When looking at data from nine different sources, including their own investigations, the Federal Bureau of Investigation has stated that the top states of mortgage fraud in 2008 were Arizona, California, Florida, Illinois, Georgia, Maryland, Michigan, Missouri and Texas.
Experts in the industry agree that there are strong correlations between distressed markets of real estate and increased fraud. The current market in housing, suffering from increases in inventory, higher rates of foreclosure and lack of sales, offered a very attractive environment for perpetrators of mortgage fraud that discovered ways to get around gaps and loopholes within the market of mortgage lending.
The majority of analysts expect this depressed economy to last at least until the end of the year, offering a favorable environment in which expanded activity for mortgage fraud can be done. Industry personnel might feel pressured into locating alternative methods in order to match their enjoyed income during the boom years of real estate. A lot of people would be willing to go through criminal activities in order to reach this particular goal. Increasing amounts of individuals would also be willing to participate in and take under consideration illicit deals just to avoid overall foreclosure.
Actions that have been taken to battle this crisis of mortgage also creates new opportunities for fraud, like scams directed at those people who look to purchase foreclosed properties, as well as federal funds that have been earmarked for mortgage industries.
Three primary kinds of fraud would be short-sale, foreclosure-rescue and builder-bailout schemes.
Builder-bailout schemes refer to builders providing extra incentives for buyers which aren’t disclosed within the documents of mortgage loan. This means that the purchase price within the report is not accurately representative of what the buyer actually paid.
When it comes to short-sale schemes, the fraudsters get buyers to buy homes and then go straight into default. These scammers will afterwards offer to purchase this home in short sales, where lenders agree to accept much less compared to the actual amount owed.
Schemes of foreclosure-rescue deal with scammers who offer to save the owners from foreclosures for a certain fee. In several cases, these scammers have owners sign homes over and gather rent while letting these homes go straight into default or they steal equity through second mortgages or home sales.