Weston Title Reports of Mortgage Fraud Increases by 88%
The Florida housing bust continues to be the unwanted gift that keeps on giving. This time, the surprise, that really isn’t, is the number of suspected mortgage fraud cases has jumped up nearly 88% this second quarter as reported by the Wall Street Journal.
Earlier this year I noted the Florida foreclosure backlog was once again reduced to a crawl because homeowners tuned into the fact that their banks engaged in underhanded tactics that caused them to forfeit their right to foreclose on the home they couldn’t prove they owned.
Now more fraud is being uncovered as mortgage servicers, under pressure from government and private investors, sift through loan files to those that don’t meet underwriting guidelines so investors can recoup their losses by forcing banks to buy back these bad loans. So far, nearly 30,000 suspicious activity reports have been made relating to mortgage fraud between April and June compared to approximately 15,000 reports during the same time last year.
From the Wall Street Journal article:
“Financial institutions are uncovering fraud as they sift through defaulted mortgages,” said James H. Freis Jr., the [Financial Crimes Enforcement Network] agency’s director, in a statement. “But we also continue to see indications of ongoing mortgage fraud activities.” False statements about income, home occupancy, or debts and assets were the most common type of suspicious activity.
Most of the fraudulent activity, about 81%, occurred two years ago. As you probably expected, Florida, along with California, Nevada, and Illinois, had the highest rates of mortgage fraud. Homeowners facing foreclosures in these areas would benefit to connect with a foreclosure defense attorney to work out a beneficial deal with the bank if they suspect their home loan may have been handled fraudulently. The holidays are just around the corner. Weston Title wonders what kind of gifts the housing bubble will have waiting under the trees of Florida’s homeowners.