Mortgage Fraud Rising in the Washington Area
Maryland is on the FBI's top ten list of states with the most mortgage fraud, and the District is among areas "newly identified as having significant mortgage fraud problems," according to the bureau's 2008 Mortgage Fraud Report, which was just released.
Nationwide, the number of mortgage fraud suspicious-activity reports referred to law enforcement increased 36 percent over 2007, the report says. And the government's economic stimulus programs could fuel further increases, according to the FBI:
In an effort to expeditiously provide relief to the declining U.S. economy, lawmakers may not have fully realized the inherent vulnerabilities associated with these and similar programs, including the lack of transparency, accountability, oversight, and enforcement that predispose them to fraud and abuse.
In particular, fraud involving foreclosure rescue and loan-modification schemes are "emerging as recent vulnerabilities," the FBI report says.
Perpetrators solicit homeowners with mail flyers offering to help them stop the foreclosure process on their homes. Homeowners are falsely told that their mortgages would be renegotiated, their monthly payments would be reduced, and delinquent loan amounts would be renegotiated. ... Perpetrators require an up-front fee ranging from $1,500 to $5,000 from homeowners. ... Perpetrators often request that the victim homeowners stop payments and communication with their lender. When victims receive delinquency and foreclosure notices, the perpetrators convince them that the loan was renegotiated, but that the lender needs a good faith payment to secure the new account.
July 9, 2009; 6:00 AM ET
Categories: Foreclosure , Loan modifications , Mortgages , Statistics , The economy , The market
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