Regardless of the efforts of policy makers to control these activities, mortgage fraud is still on the rise. On the other hand, Tim Grace, CoreLogic's senior vice president of Fraud Analytics, said that mortgage fraud risk is falling off, as also shown on their 2010 Mortgage Fraud Trends reports. Still, mortgage fraud is still an important subject for mortgage business because of the projected $14 billion in fraud losses that came about in 2009 alone.
It's not proper to know that mortgage professionals themselves head these schemes because for one, mortgage fraud has played a very important role in fueling housing crisis in the past years especially in California it got the top rank in Fannie Mae's top ten states with mortgage fraud.
Real estate professionals, lenders, bank officers, attorneys, and tile insurance agents are the ones that have been convicted of mortgage fraud. And so each of these fraudsters might have different or the same mortgage scheme used to manipulate the original purpose of the deal. Types of mortgage fraud schemes vary and some of them are Backward Application, Air Loans, Silent Seconds, Reverse Mortgage Scams, Nominee Loans, Property Flips, Foreclosure schemes, and Equity skimming.
MARI Index has determined the top ten states with mortgage fraud: Rhode Island (315), Florida (279), Illinois (215), Georgia (180), Maryland (170), New York (165), Michigan (136), California (111), Colorado (98), Missouri (98).
Here's Fannie Mae's top ten states hit the worst by mortgage fraud: California, Florida, Michigan, Georgia, Arizona, Texas, Minnesota, Illinois, Virginia, and Missouri.
Mortgage fraud has been considered as one of the fastest growing white collar crimes in the country. Although the FBI is sure that it cost billions annually, it's true extent is unknown. Who shoulders the effects? All of us through increased mortgage costs, higher taxes, and expensive properties. Even if its true extent is unknown, we can still do something to prevent it. Let us educate ourselves so we can identify any fraud activities we know and witnessed. And as responsible citizens of this country, we must report any mortgage fraud that we know so that it can be investigated and the fraudsters will be prosecuted properly.
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