Mortgage fraud can take many forms, including:
- Securing multiple loans that exceed the value of the property
- Selling the same property multiple times to different buyers
- Dishonest appraisals resulting in inflated home values
- Schemes profiting from defaults on FHA secured loans
- Straw buyer schemes to conceal the true borrower from the banks or authorities
According to industry reports, mortgage fraud costs lenders about $2.5B per year, and the FBI estimates that cost could reach as much as $4.2B per year. More organized crime organizations and street gangs are getting involved in mortgage fraud each year. This epidemic of mortgage fraud benefits criminals while severely harming the participants and dearly costing banks and taxpayers. So how do we stop it?