Mortgage Fraud

Mortgage Fraud

Mortgage Fraud has become so rampant that by the time the US hit 2004 the FBI said it was becoming an epidemic**. There are two main areas that Mortgage Fraud is handled by the FBI: "Fraud for Profit and Fraud for Housing". An explanation of these two kinds of Mortgage Fraud as quoted from the FBI's page:

"Fraud for Profit is sometimes referred to as "Industry Insider Fraud" and the motive is to revolve equity, falsely inflate the value of the property, or issue loans based on fictitious properties. Based on existing investigations and mortgage fraud reporting, 80 percent of all reported fraud losses involve collaboration or collusion by industry insiders. "

"Fraud for Housing represents illegal actions perpetrated solely by the borrower. The simple motive behind this fraud is to acquire and maintain ownership of a house under false pretenses. This type of fraud is typified by a borrower who makes misrepresentations regarding his income or employment history to qualify for a loan."
Ref.
fbi.gov/publications/financial/fcs_report052005/fcs_report052005.htm

So how do they do it, how do they defraud people of their money? Just like any other criminal, they feed institutions and victims with false papers, documents and even stolen identity. In fact identity theft is a big part of the hold scheme of things. Some put on the disguise of being real estate agents or mortgage brokers, so your best bet is to do some VERY GOOD research before handing anyone your money!

More info:

fbi.gov/publications/financial/fcs_report052005/fcs_report052005.htm
** edition.cnn.com/2004/LAW/09/17/mortgage.fraud/

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