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Fraudulent Mortgages Run Rampant

May 12, 2011

What is Mortgage Fraud? Mortgage Fraud includes everything from borrowers falsifying information on loan documents, fraudulent appraisals, to elaborate schemes that target home owners underwater on their mortgage and more. According to the Treasury Department the number of suspected fraudulent activities increased 5 percent in 2010. The number of reported incidents was 70,472, up from 67,507 in 2009 and 37,000 in 2006 during the housing boom. It is apparent that people are taking advantage of the housing crisis and the agency is estimating a loss of approximately $1.5 billion from 2010 alone.

Despite the increase in reports, the number of actual cases has dropped 41 percent from 2009. This change is due to the fact that banks have tightened their lending standards and have lower originations, less loan volume, less attention being paid to in terms of what’s happening to those loans, and tighter credit scrutiny. Banks are requiring more documentation, which is making it more difficult to falsify documents. 

According to the Wall Street Journal, the states in which fraud is most prevalent are:

1. Florida; 2. New York; 3. California; 4. New Jersey; 5. Maryland; 6. Michigan; 7. Virginia; 8. Ohio; 9. Colorado; 10. Illinois.

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