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FBI report on mortgage fraud

The 2008 FBI report on mortgage fraud warns of an increase in fraud and contains descriptions of fraudulent schemes. It attributes some of the problems to "vulnerabilities in HERA and EESA legislation."

"The 2008 current housing market, suffering from an increase in inventory, lack of sales, and a high foreclosure rate, provided an attractive environment for mortgage fraud perpetrators who discovered methods to circumvent loopholes and gaps in the mortgage lending market. Lenders, builders, sellers, borrowers, and other market participants employed and modified old schemes such as property flipping, builder-bailouts, seller assistance, short sales, air loans, foreclosure rescues, and identity theft (see 2007 FBI Annual Mortgage Fraud Report)32; and adopted new schemes, including reverse mortgage fraud, credit enhancements, condo conversion, loan modifications, pump and payeach of which are surfaced in response to tighter lending practices. Emerging fraud trends are draining lender, law enforcement, regulatory, and consumer resources."

To see statistical data on fraud and detailed descriptions of the fraudulent schemes click on the link to the report:

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