Emerging trends in mortgage fraud

Reports furnished by Mortgage Asset Research Institute or MARI indicate that incidence of mortgage fraud is at an all time high. It increased by 26% during 2007-2008. Mortgage fraud trends manifested differently in various states. The MARI report indicates the following-

• The incidence of mortgage fraud decreased during 2006-2007. However, in Georgia, mortgage fraud escalated drastically. As a result, Georgia which was in the in the 7th position got promoted to the 4th place during 2008.
• In California conditions improved and it ranked in the 4th position in 2007. It slid down to the 8th position in 2008 indicating that less number of mortgage fraud activities have taken place.
• Credit report related fraud dropped during 2007-2008 to 4% from 9%.
• The most effected state was Maryland where mortgage fraud increased to the extent that it pushed the state’s ranking to the 5th position from the 15th position.

Emerging trends in mortgage fraud

Since mortgage fraud has escalated over the years, financial analyst state that the ongoing recession has caused many people to live on the edge. The increase in mortgage fraud may be due to rising desperation and an attempt to survive the credit crunch.

• The incidence of housing fraud is the maximum as compared to the other types of mortgage fraud. In housing fraud, which is performed mostly by borrowers, the borrower furnishes false information about income, employment or assets so that he can qualify for a mortgage loan.
• Number of foreclosure rescue scammers has also increased. In foreclosure rescue scams, the scammers take advantage of the borrower’s financial condition. In majority of the cases, the borrowers are tricked into transferring property title to the scammers.

Identify mortgage fraud

Sometimes it is difficult to identify mortgage fraud. However, pay heed to the following signs-

• You may come across a property broker who can insist on hiring services of a particular real estate broker.
• Make sure you have copies of all documents of any transaction or agreement that has taken place between you and any other entity.
• Avoid signing documents that have blank spaces or incomplete information. This may land you in serious trouble.
• You can also find out credentials of a real estate broker from professionals who furnish details of companies involved in mortgage fraud. They also provide extensive information on mortgage fraud.

Mortgage fraud is one of the rapidly growing crimes in the country. In fact, the federal government has created a special task force so that the incidence of mortgage fraud can be minimized.