Mortgage Fraud

2808 words 12 pages
Mortgage Fraud

Table of Contents

Abstract 3
Mortgage Fraud 4
Mortgage Fraud Statistics 4
Reports of Fraud 5
Key players in a real estate & mortgage transaction 5-6
Factors for Mortgage Fraud 7
The Fraud Triangle 7
Common Mortgage Fraud Schemes 8
Who are victims of mortgage fraud? 9
How to avoid becoming a victim of Mortgage Fraud 10
How to report fraud 11
Mortgage Fraud Indictment 11-12
Conclusion 13
References 14

Since the housing market bust, there has been an explosion in the number of federal investigation of mortgage fraud scheme across the country. Mortgage Fraud is a violation of state and
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Factors for Mortgage Fraud
According to the FBI website, professionals and borrowers are motivated to commit mortgage fraud based on two general factors, fraud for housing and fraud for profit.
Fraud for profit also refers as industry insider fraud since most of the perpetrators are industry professionals. Some of these professionals include real estate agent, loan officers, sales agents insurance agents, inspectors, appraisers and the builder. Fraud for profit occurs when the fraudster obtains mortgage financing and steals some or all of the funds with the purpose of maximizing profits on a loan transaction. Fraud for profit involves using many mortgage fraud schemes which will be disused later.
Fraud for housing on the other hand is perpetrated by the borrower sometimes with the help of real estate professionals. The borrower misrepresents information on their mortgage application, for the sole purpose of acquiring and maintaining ownership of the property. Information includes income, place of employment, sources of down payment, omit relevant details etc. The borrower wants the property and has all intension on paying the mortgage but falsify records in order to buy the property. Generally these borrowers would not qualify for a mortgage due to inability to service the debt. On occasions this is done with the help of industry professionals who are motivated by the


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