Mortgage fraud increased 26 percent in 2008 compared to 2007, according to a study released Monday by the Mortgage Asset Research Institute.
The increase reflects fewer loans. About $1.4 trillion in home loans were made in 2008, down a third from the previous year.
More than 60 percent of the mortgage fraud cases last year were tied to falsified applications; 28 percent reflected falsified tax returns or financial statements; and 22 percent were related to appraisals.
The fastest-growing scams, the report said, are perpetrated by foreclosure prevention specialists, who offer to rescue distressed borrowers, then flee with their money.
The 10 states with the most fraud (in descending order) were:
- Rhode Island
- New York
Source: The Associated Press, Alan Libel (03/19/2009)
Federal prosecutors announced 19 indictments Monday in a mortgage scheme that stole nearly $13 million in home equity and victimized more than 100 home owners.
Under the scam, home owners facing foreclosure were promised lower home payments and cash up-front if they agreed to add another name to their home’s title. The victims were led to believe they were paying rent to the investors to give them time to get their affairs in order, according to officials.
Prosecutors say the scam was headed by Charles Head of La Habra, Calif. Prosecutors say additional indictments are likely as they continue investigating.
In all, prosecutors say Head defrauded 115 financially strapped home owners in 22 states of at least $12.6 million. The fraud began in and continued through 2006.
Victims ranged from first-time home buyers to the elderly and cost 90 percent of the victims their homes, said Assistant U.S. Attorney Ellen Endrizzi.
Source: The Associated Press, Aaron C. Davis (03/24/08)