The amount of mortgage fraud reports amongst home loans made 2008 increased 26% from one year earlier. The statistics revealed on 17 March by the Mortgage Asset Research Institute. The raise came as lenders significantly tightened the standards, making the processes more complex for borrowers to qualify for their home loans without large down payments, solid credit with proof of their incomes. According to trade publication Inside Mortgage Finance, with credit far tighter, roughly $1.4 trillion in home loans were made 2008, down approximately a third from one year earlier.

The fraud report says the recession has increased pressure on shady mortgage lenders, brokers and borrowers to lie on home loan applications. One of its co-authors Jennifer Butts said “There’s a lot more desperation, with the economy being what it is”. The study showed that in 2008 over 60 of mortgage fraud cases stemmed from falsified
applications, whereas 28% came from tax proceeds or financial statements, and 22% came from appraisals.

The report said a special fast-growing scheme is coming from “foreclosure prevention specialists”. They advocate rescuing distressed borrowers, and at times tricking the borrower to sign over the deed to the home. However, recently several states make few toughened penalties for such scams, though just a few state attorneys general capable to seek criminal charges as well as jail time. The data collected in the 11th annual report gets from approximately 600 mortgage companies, small community banks, several mortgage insurers and few mortgage finance giants like Fannie Mae and Freddie Mac. The report does not say the actual amount of fraud cases nationally or by state.

Related Tags

mortgage fraud us

Related posts:

1. New Housing Plan for USA