StateStats: Mortgage Fraud
Mortgage fraud is on the rise. The increase in foreclosures has enabled criminals to exploit vulnerable homeowners seeking financial help and guidance, according to the FBI’s recent “2006 Mortgage Fraud” report.
A common form of fraud is property flipping, which involves false appraisals and fraudulent loan documents. Others defraud consumers by steering them to high-interest loans or by issuing deceptive contracts. In other scams, people posing as “foreclosure rescue” experts persuade homeowners with bad credit to sign over their deeds to a third person who can get a second mortgage against the home. The “experts” pocket the cash and default on the loan.
The FBI opened 1,210 mortgage fraud cases in FY 2007, nearly triple the number of new cases in 2003. Convictions more than doubled from 123 in FY 2006 to 260 in FY 2007.
California, Colorado, Illinois, Indiana, Maryland, Minnesota, Missouri, Nevada, New Hampshire, New York and Rhode Island allow consumers to rescind contracts with foreclosure consultants and fine violators.
The FBI compiled and analyzed data from law enforcement and industry sources to determine those areas of the country most affected by mortgage fraud.